(VI) Apportionment of income The paragraph below is current to 28 July 2011 To update legislation see ACL Legislation For

information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-4300] Attribution of income to corpus Interest receivable accrues daily, as a matter of common law.1 In all jurisdictions except the Northern Territory, legislation also provides2 for the daily accrual of rents,3 annuities,4 dividends5 and other periodic payments in the nature of income receivable, however not to any annual sums payable under policies of assurance.6 The sums, although to be apportioned accordingly, are not recoverable before they would have been payable in the ordinary course.7 Except in the case of rent, the apportioned sums are recoverable by the persons entitled to them.8 The legislation may be contracted out of.9 For the purposes of the apportionment provisions and except in Queensland, the legislation deems dividends to have accrued during and within the period for or in respect of which they are declared.10 The effect of the common law and of this legislation is that a proportionate part of such sums otherwise receivable by a deceased person after death becomes corpus of the estate11 for administration purposes,12 while the remainder retains its character as income. Notes 1 Federal Commissioner of Taxation v Australian Guarantee Corp Ltd (1984) 2 FCR 483; 54 ALR 209; 15 ATR 982; 84 ATC 4642 ; Chow Yoong Hong v Choong Fah Rubber Manufactory [1962] AC 209 at 217; [1961] 3 All ER 1163 ; Willingale (Inspector of Taxes) v Intl Commercial Bank Ltd [1978] AC 834 at 841; [1978] 1 All ER 754; [1978] 2 WLR 452; [1978] STC 75 per Lord Diplock .2 (ACT) Civil Law (Property) Act 2006 s 250 (NSW) Conveyancing Act 1919 s 144(1) (QLD) Property Law Act 1974 s 232(1) (SA) Law of Property Act 1936 s 64 (TAS) Apportionment Act 1871 s 2 (VIC) Supreme Court Act 1986 s 54 (WA) Property Law Act 1969 s 131. There are no equivalent provisions in the Northern Territory. 3 The definition of rent for the purpose of the legislation gives it an extended meaning, to include all periodical payments or renderings in lieu of or in the nature of rent and, except in South Australia, Tasmania and Western Australia, to include rent service, rent charge and rent seck: (ACT) Civil Law (Property) Act 2006 s 248 (NSW) Conveyancing Act 1919 s 142 (QLD) Property Law Act 1974 s 231

(SA) Law of Property Act 1936 s 63 (TAS) Apportionment Act 1871 s 5 (VIC) Supreme Court Act 1986 s 53(1) (WA) Property Law Act 1969 s 130(1). There are no equivalent provisions in the Northern Territory. 4 Annuities are defined in each jurisdiction to include salaries and pensions: (ACT) Civil Law (Property) Act 2006 s 248 (NSW) Conveyancing Act 1919 s 142 (QLD) Property Law Act 1974 s 231 (SA) Law of Property Act 1936 s 63 (TAS) Apportionment Act 1871 s 5 (VIC) Supreme Court Act 1986 s 53(1) (WA) Property Law Act 1969 s 130(1). There are no equivalent provisions in the Northern Territory. 5 The definition of dividends for the purpose of the legislation also gives it an extended meaning, to include bonuses and other distributions out of the revenue of the company making the payment: (ACT) Civil Law (Property) Act 2006 ss 239, 248 (refers to dividends of companies) (NSW) Conveyancing Act 1919 s 142. The provision refers to payments from a public company but, as to dividends paid by proprietary companies: see Re Campbell (decd); Rowe v McMaster [1973] 2 NSWLR 146 at 151 per Helsham J . (QLD) Property Law Act 1974 s 231 (SA) Law of Property Act 1936 s 63 (TAS) Apportionment Act 1871 s 5 (VIC) Supreme Court Act 1986 s 53(1) (WA) Property Law Act 1969 s 130(1). 6 (ACT) Civil Law (Property) Act 2006 s 253(1) (NSW) Conveyancing Act 1919 s 144(4) (QLD) Property Law Act 1974 s 233(1) (SA) Law of Property Act 1936 s 67 (TAS) Apportionment Act 1871 s 6 (VIC) Supreme Court Act 1986 s 53(3)

(WA) Property Law Act 1969 s 134. 7 (ACT) Civil Law (Property) Act 2006 s 251 (NSW) Conveyancing Act 1919 s 144(2) (QLD) Property Law Act 1974 s 232(2) (SA) Law of Property Act 1936 s 65 (TAS) Apportionment Act 1871 s 3 (VIC) Supreme Court Act 1986 s 55 (WA) Property Law Act 1969 s 132. 8 (ACT) Civil Law (Property) Act 2006 s 252 (NSW) Conveyancing Act 1919 s 144(3) (QLD) Property Law Act 1974 s 232(3), 232(4) (SA) Law of Property Act 1936 s 66 (TAS) Apportionment Act 1871 s 4 (VIC) Supreme Court Act 1986 s 56 (WA) Property Law Act 1969 s 133. 9 (ACT) Civil Law (Property) Act 2006 s 253(2) (NSW) Conveyancing Act 1919 s 144(5). See also Re Hood; Fenwick v Brodie (1939) 40 SR (NSW) 449 . (QLD) Property Law Act 1974 s 233(2) (SA) Law of Property Act 1936 s 68 (TAS) Apportionment Act 1871 s 7 (VIC) Supreme Court Act 1986 s 53(4) (WA) Property Law Act 1969 s 134(2). 10 (ACT) Civil Law (Property) Act 2006 ss 249, 250 (NSW) Conveyancing Act 1919 s 142 (definition of dividends) (SA) Law of Property Act 1936 s 63 (definition of dividends) (TAS) Apportionment Act 1871 s 5 (definition of dividends) (VIC) Supreme Court Act 1986 s 53(2) (WA) Property Law Act 1969 s 130(2). As to the period to which a dividend payment refers, and the relationship of that period to the date of declaration and the date of payment, see Re Campbell (decd); Rowe v McMaster [1973] 2

NSWLR 146 ; Re Oppenheimer; Oppenheimer v Boatman [1907] 1 Ch 399 ; Re Muirhead; Muirhead v Hill [1916] 2 Ch 181 . See, however, In the Will and Estate of McCutcheon (decd) [1960] VR 289 at 292-3 ; Re Buck (decd) [1964] VR 284 at 286, 287, 290 per Hudson J . 11 Re Hood; Fenwick v Brodie (1939) 40 SR (NSW) 449 (apportionment between life tenant and remainderman); Permanent Trustee Co of New South Wales Ltd v Milson (1946) 47 SR (NSW) 159 .12 (CTH) Income Tax Assessment Act 1997 s 65(1), 65(2), 65(4).

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(III) Trustees The paragraph below is current to 18 April 2009 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [295-315] Trustees power in relation to security interests A trustee has power to borrow moneys for the purposes of the trust1 but may not grant or create any security interest of or over any trust property unless a power to do so is expressly or impliedly conferred on the trustee by the instrument creating the trust2 or such a power is given by statute3 or given in pursuance of a court order.4 Where there is more than one trustee of a trust5 the power needs to be exercised by all of the trustees in order for the security interest to be validly created.6 However, where two or more

trustees are appointed jointly, then, unless the instrument creating the trust provides to the contrary, their powers may be exercised by the trustee or trustees surviving at the relevant time.7 A power of sale does not imply a power to grant or create a security interest,8 although a power to mortgage does authorise the inclusion of a power of sale in the relevant security instrument.9 A power to manage the property forming the trust fund, where exercise of that power necessitates the expenditure of capital, may be construed as implying a power to mortgage.10 Notes 1 See, for example, Droop v Colonial Bank (1881) 7 VLR (E) 71; 3 ALT 13 ; Re Berrys Trusts (1893) 7 QLJ 63 ; Re Beal (1898) 23 VLR 569; 4 ALR 49; 19 ALT 195 ; Re Trusts of Ann Street Presbyterian Church [1902] QWN 90 ; Re Hammond; Hammond v Hammond (1903) 3 SR (NSW) 270; 20 WN (NSW) 123 ; Re Will of Armstrong (1907) 26 NZLR 1101 ; Re Ryan [1902] QWN 18 ; Re Paget [1938] QWN 42 ; Re Martin [1956] QWN 2 , SC(QLD).2 See generally trusts.3 See [295-320].4 See [295-325].5 In some jurisdictions, a maximum of four trustees of a private, non-charitable trust is imposed by statute: (ACT) Trustee Act 1925 ss 6(6)(b), 7(2)(b), 7(6)(b) (NSW) Trustee Act 1925 ss 6(5)(b), 7(5)(b) (QLD) Trusts Act 1973 s 11 (the Minister may allow additional trustees to be appointed) (VIC) Trustee Act 1958 s 40 (WA) Trustees Act 1962 s 7. Provision is made for the case where there were originally more than four trustees: ibid s 7(5). There are no equivalent provisions in the other jurisdictions. See further trusts [430-3295] (number of trustees). 6 Neill v Hewens (1953) 89 CLR 1 at 12; 54 SR (NSW) 65; 71 WN (NSW) 37 Act 1925 s 57(1), 57(2) (NT) Trustee Act 1893 (SA) s 23(1) (NSW) Trustee Act 1925 s 57(1) (QLD) Trusts Act 1973 ss 4(4), 16(1) (SA) Trustee Act 1936 s 32(1). Where a power, including a power to mortgage, is subject to the direction, request or authority of any person and that person is dead, of unsound mind, a lunatic, under disability or absent from the State, the Supreme Court may authorise the trustee to deal with the property as if the direction, request or authority had been given so long as this will not injuriously affect any beneficial interest of that person: ibid s 48(1). (TAS) Trustee Act 1898 s 25(1) (VIC) Trustee Act 1958 ss 2(3), 22(1) (WA) Trustees Act 1962 ss 5(2), 5(3), 45(1). 8 Haldenby v Spofforth (1839) 1 Beav 390; 48 ER 991; Stroughill v Anstey (1852) 1 De GM & G 635; 42 ER 700. As to trustees of a trust for sale see [295-345].9 Bridges v Longman (1857) 24 Beav 27; 53 ER 267.10 Re Bellinger; Durell v Bellinger [1898] 2 Ch 534; (1898) 67 LJ Ch 580; 79 LT 54 . This power is given statutory recognition in some jurisdictions: see [295-320]. .7 (ACT) Trustee

The paragraph below is current to 18 April 2009 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [295-320] Statutory powers Trustees of non-charitable trusts in the Australian Capital Territory, New South Wales, South Australia and Victoria1 and trustees of all trusts in Queensland and Western Australia2 which have (in either case) the power to pay or apply capital money forming the trust for any purpose or in any manner 3 are given a statutory power to raise the necessary money by granting a mortgage of all or any part of the trust property which is held on the same trusts.4 Except in the Australian Capital Territory, New South Wales and Tasmania, this power (and the other statutory powers to mortgage referred to below) is expressed to be given notwithstanding anything to the contrary contained in the instrument (if any) creating the trust.5 The power may not be exercised to enable money to be borrowed to acquire additional assets for the trust.6 However, where all beneficiaries are of full age and capacity they may authorise trustees to exceed the normal limitations on their power.7 In addition, in all jurisdictions other than Queensland and Victoria, such trustees are given the power by statute to mortgage for certain specified purposes. In the Australian Capital Territory, New South Wales and South Australia, trustees of non-charitable trusts have a statutory power to mortgage where money is due in payment of rates or taxes on or in relation to land or the trustee is otherwise under a statutory obligation to expend money in relation to land, but does not have any money which is held on the same trusts as the relevant land. The power may be exercised in respect of the land or in respect of any other property held on the same trusts.8 In the Northern Territory, South Australia and Tasmania, except where the instrument creating the trust expressly forbids it, the trustee of a renewable leasehold estate for life or for a term of years is given a statutory power to raise money required to pay for the renewal by giving a mortgage of the hereditaments to be comprised in the new lease or by giving a mortgage of any other hereditaments which are subject to the same trusts or uses. The mortgagee is not required to see that the money is wanted or that the amount raised is not more than is required for the purpose of renewing the lease.9 The same result follows in the Australian Capital Territory, New South Wales and Western Australia, as the legislation gives a right to pay such amounts from capital and a power to mortgage where there is a power to pay or apply capital for any purpose.10 In the Australian Capital Territory, the court has the power to confer on trustees power to mortgage where it is expedient to do so11 or, in the case of certain leasehold trusts (such as a trust for a child), to authorise the trustee to mortgage the property to raise money for specified improvements and repairs.12 In New South Wales, a statutory power to mortgage is also given for the purpose of effecting improvements of, and repairs to, the trust property.13 In South Australia, a statutory power to mortgage is also given for the purpose of paying insurance premiums in respect of the trust property14 unless such a power is contrary to the terms of the instrument creating the trust.15 A statutory power is also given to the trustees of any church or church congregation to mortgage land, with the consent of the congregation, and to the trustees of a religious association to mortgage land (in either case), notwithstanding the terms of the instrument creating the trust.16 Notes 1 (ACT) Trustee Act 1925 s 38(3)

(NSW) Trustee Act 1925 s 38(2) (SA) Trustee Act 1936 s 28B(3) (VIC) Trustee Act 1958 s 20(2). 2 (QLD) Trusts Act 1973 s 45 (WA) Trustees Act 1962 s 43(1). 3 In some jurisdictions a power to pay or apply capital money to, for example, repair and maintenance of the trust property is also given by statute: see trusts [430-4155] note 6.4 (ACT) Trustee Act 1925 s 38(1) (NSW) Trustee Act 1925 s 38(1) (QLD) Trusts Act 1973 s 45 (SA) Trustee Act 1936 s 28B(1) (VIC) Trustee Act 1958 s 20(1) (WA) Trustees Act 1962 s 43(1). As to applications to the court where the trustee does not have the power to mortgage the property see [295-325]. 5 (QLD) Trusts Act 1973 s 7A (SA) Trustee Act 1936 s 28B(3) (VIC) Trustee Act 1958 s 20(2) (WA) Trustees Act 1962 s 43(2). There are no equivalent provisions in the Australian Capital Territory, New South Wales and Tasmania. An express exclusion of the statutory power is not necessary. It is sufficient if the application of those powers is inconsistent with the purport of the instrument: Inland Revenue Commissioners v Bernstein [1961] Ch 399; [1961] 1 All ER 320 ; Re Gertsman (decd) [1966] VR 45 at 55-6 per Pope J; Re Havill (decd) [1968] NZLR 1116 at 1126 . 6 Re Suenson-Taylors Settlement Trusts [1974] 3 All ER 397; [1974] 1 WLR 1280. Compare Scott v Murray (1887) 13 VLR 425 .7 See, for example, trusts [430-4055] (consent to purchase trust property by beneficiaries), [430-5510], [430-5515] (consent, concurrence or acquiescence in breach of trust by beneficiaries).8 (ACT) Trustee Act 1925 s 38(2) (NSW) Trustee Act 1925 s 38(1A) (SA) Trustee Act 1936 s 28B(2). 9 (NT) Trustee Act 1893 (SA) s 19 (SA) Trustee Act 1936 s 26 (TAS) Trustee Act 1898 s 22. 10 (ACT) Trustee Act 1925 ss 37-39

(NSW) Trustee Act 1925 ss 37-39 (WA) Trustees Act 1962 ss 36, 43, 44. 11 (ACT) Trustee Act 1925 s 81.12 Ibid s 82.13 (NSW) Trustee Act 1925 s 82A(2). As this power, unlike most other powers in the Act, is not expressed to be subject to the trust instrument, it seems that it is conferred irrespective of the terms of the trust instrument. 14 (SA) Trustee Act 1936 s 25(4). See, for example, In the Matter of South Australian Perpetual Forests Ltd 1964 Trust Deed; IOOF Australia Trustees Ltd (Applicant) (1995) 64 SASR 434 .15 (SA) Trustee Act 1936 s 25(12).16 Ibid ss 51-53. The paragraph below is current to 18 April 2009 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [295-325] Court sanctioned mortgages Where a trustee does not have power to grant a mortgage or to otherwise dispose of trust property, the trustee or a beneficiary under the trust may apply to the court for the necessary power.1 In most jurisdictions, if the court considers that the mortgage or other disposition is expedient in the management or administration of the trust property (or, in Queensland and Western Australia, would be in the best interests of the majority of the beneficiaries of the trust), the court may (other than in the Northern Territory), notwithstanding anything to the contrary in the instrument (if any) creating the trust, by order confer on the trustees, either generally or in any particular instance, the necessary powers for the purpose on such terms and conditions (if any) as the court thinks fit.2 The court may also vary or revoke any such order or make a new order.3 In addition, in the Northern Territory and South Australia, a trustee may obtain a court order to mortgage trust property to raise money for, in the Northern Territory, alterations and repairs to the property and, in South Australia, for building or rebuilding or repairing, reinstating, altering, adding to or in any way improving the property or any part of it, unless the instrument creating the trust provides to the contrary or the trustee is bound to convey the property to the beneficiary upon request.4 In Tasmania, a trustee may, with the sanction of the court and notwithstanding anything to the contrary in the relevant trust instrument, mortgage all or part of the trust property to raise money to preserve or improve the trust property, to insure the trust property against fire or to discharge any debts or liabilities in relation to the trust property.5 Notes 1 This is given statutory recognition in: (ACT) Trustee Act 1925 s 92(1) (NT) Trustee Act 1893 (SA) s 50A(1)(a) (NSW) Trustee Act 1925 s 92(1) (QLD) Trusts Act 1973 s 94(3) (TAS) Trustee Act 1898 s 47(3)

(VIC) Trustee Act 1958 s 63(3) (WA) Trustees Act 1962 s 85(4). There are no equivalent provisions in South Australia. As to trustees statutory powers see [295320]. 2 Riddle v Riddle (1952) 85 CLR 202 at 220; [1952] ALR 167; (1952) 26 ALJ 86 per Williams J; Perpetual Trustee Co Ltd v Godsall [1979] 2 NSWLR 785 ; Re Cravens Estate; Lloyds Bank Ltd v Cockburn (No 2) [1937] Ch 431 at 436 per Farwell J; Re Earl of Strafford (decd); Royal Bank of Scotland Ltd v Byng [1980] Ch 28 at 45; [1979] 1 All ER 513; [1978] 3 WLR 223 per Buckley LJ (expedient means expedient for the trust as a whole, not for merely one or some beneficiaries of the trust).3 (ACT) Trustee Act 1925 s 81 (NT) Trustee Act 1893 (SA) s 50A(1)(a), 50A(2). Consent of all beneficiaries may be required (ibid s 50A(4)) although it can be dispensed with if a beneficiary does not respond to a notice (ibid s 50A(5)). A further similar power is available under ibid s 18(2) where the Supreme Court has authorised expenditure by the trustee out of the capital of a trust or estate of a sum in repairing, reinstating or improving the trust property or estate except where expressly forbidden by the instrument creating the trust (ibid s 18(4)) or where the trustee is bound to convey any land or building to the beneficiary upon being requested to do so (ibid s 18(3)). (NSW) Trustee Act 1925 s 81 (QLD) Trusts Act 1973 s 94 (SA) Trustee Act 1936 s 59B. For a general consideration of this power see City of Burnside v AG (SA) (1993) 61 SASR 107; 81 LGERA 167 . (TAS) Trustee Act 1898 s 47 (this provision extends to trustees of charitable, religious and public trusts, notwithstanding anything to the contrary in the relevant Act or instrument creating the trust). See, for example, Re Edgar [1962] Tas SR 145 . (VIC) Trustee Act 1958 s 63 (WA) Trustees Act 1962 s 89. The High Court of Australia has taken a broad view of this power: see, for example, Riddle v Riddle (1952) 85 CLR 202; [1952] ALR 167; (1952) 26 ALJ 86 (majority of the court rejected the view that the trust would have to show itself to be a special case). See also Re WD & HO Wills (NZ) Ltd Pensions Fund [1974] 2 NZLR 27 ; Re Baker (decd); Rouse v A-G (Vic) [1961] VR 641 . Compare Freeman v A-G (NSW) [1973] 1 NSWLR 729 ; Re Salting [1932] 2 Ch 57; (1932) 101 LJ Ch 305 ; Re Bayne (1891) 25 SALR 109; Re Forsters Settlement; Michelmore v Byatt [1954] 3 All ER 714; [1954] 1 WLR 1450. 4 (NT) Trustee Act 1893 (SA) s 18(2) (SA) Trustee Act 1936 s 25B. 5 (TAS) Trustee Act 1898 s 55. This section does not apply where the land is settled land under the (TAS) Settled Land Act 1884 and the purpose of the expenditure is not contemplated by that Act: Re Hallam (1908) 4 Tas LR 59 . Compare Re Tate (1909) 5 Tas LR 84 (the section was held to apply in order to preserve the trust property); Re Reads Settlement (1922) 18 Tas LR 4 (money required for payment of trust liabilities). Any sum so raised may be raised at such a rate of interest and repayable over such a period of time as the court sanctions. The paragraph below is current to 18 April 2009

To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [295-330] Protective trusts A protective trust is a trust under which the relevant income is held for a principal beneficiary for the maintenance of that person, that persons spouse, children and others.1 The instrument creating such a trust frequently provides that the principal beneficiary cannot mortgage or otherwise charge or encumber his or her interest in the trust and that upon any attempt to do so a discretionary trust will arise for his or her benefit and for the benefit of the other beneficiaries of the trust. Such provisions vary considerably in form and are strictly construed by the courts.2 Alternatively, a settlor or testator may direct that income be held on protective trusts for a principal beneficiary3 and thereby incorporate into the settlement or will (as the case requires) detailed statutory provisions designed to make such income inalienable by the principal beneficiary4 and available, despite attempted alienation, for the maintenance, support and benefit of the principal beneficiary, that persons spouse, children and others.5 Special provisions in New South Wales and Queensland provide for relief from forfeiture where either the mortgage is no longer in operation when the beneficiary becomes entitled (unless the trust instrument expressly provides to the contrary) or, notwithstanding any stipulation to the contrary, a voluntary alienation is made with the sanction of the court.6 Notes 1 See generally trusts [430-395].2 See, for example, Re Wormald (1890) 43 Ch D 630 .3 (ACT) Trustee Act 1925 s 45(1) (NSW) Trustee Act 1925 s 45(1) (QLD) Trusts Act 1973 s 64(1) (TAS) Trustee Act 1898 s 30(1) (VIC) Trustee Act 1958 s 39(1) (WA) Trustees Act 1962 s 61(1). There are no equivalent provisions in the Northern Territory and South Australia. The statutory provision provides a convenient means for testators to set up protective trusts: Re Wilcox; Wilcox v Wilcox [1978] Tas SR 82 at 84 per Green CJ. 4 (ACT) Trustee Act 1925 s 45(2) (NSW) Trustee Act 1925 s 45(3) (QLD) Trusts Act 1973 s 64(1)(a) (TAS) Trustee Act 1898 s 30(1)(a) (VIC) Trustee Act 1958 s 39(1)(a) (WA) Trustees Act 1962 s 61(2). There are no equivalent provisions in the Northern Territory and South Australia.

5 (ACT) Trustee Act 1925 s 45(2), 45(6) (NSW) Trustee Act 1925 s 45(6). The statutory restriction does not apply if the instrument creating the trust provides to the contrary: ibid s 45(9). (QLD) Trusts Act 1973 s 64(1)(b) (TAS) Trustee Act 1898 s 30(1)(b). The statutory restriction does not apply if the instrument creating the trust provides to the contrary: ibid s 30(2). (VIC) Trustee Act 1958 s 39(1)(b) (WA) Trustees Act 1962 s 61(3). The statutory restriction does not apply if the instrument creating the trust provides to the contrary: ibid s 61(4). There are no equivalent provisions in the Northern Territory and South Australia. 6 (NSW) Conveyancing Act 1919 s 29C (QLD) Property Law Act 1974 s 18. The paragraph below is current to 18 April 2009 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [295-335] Custodian trustee In Queensland, Tasmania and Western Australia, a custodian trustee holds the title to trust property but does not have the power to deal with it, including the power to grant or create a security interest, other than in accordance with the written directions of the trustee under the trust (the managing trustee).1 Where there is more than one managing trustee, the majority may direct the custodian trustee to do any act including, where the managing trustee has the necessary power, to grant or create a security interest.2 The custodian trustee is under a statutory duty to concur in and perform all acts to enable exercise of the managing trustees power.3 A person dealing with the custodian trustee does not need to inquire as to the concurrence or otherwise of the managing trustee and is not affected by notice of the fact that the managing trustee has not concurred.4 In South Australia, the Public Trustee may be appointed as a custodian trustee. The trust property is vested in the custodian trustee but its management continues in the hands of the other trustees (the managing trustees). The custodian trustee must do all things necessary for the managing trustees to perform their functions and to exercise their powers under the trust.5 In Victoria, the State Trust or an approved corporation6 must be appointed as a custodian trustee. The trust property is transferred to the custodian trustee but its management remains vested in the other trustees as managing trustees and the custodian must act in accordance with their directions.7 Notes 1 (QLD) Trusts Act 1973 s 19 (TAS) Public Trustee Act 1930 ss 23 (Public Trustee may be appointed as custodian trustee of any trust), 24

(WA) Trustees Act 1962 s 15. There are no equivalent provisions in the other jurisdictions. See generally trusts. 2 (QLD) Trusts Act 1973 s 19(2)(d) (TAS) Public Trustee Act 1930 s 24(e) (WA) Trustees Act 1962 s 15(2)(d). 3 (QLD) Trusts Act 1973 s 19(2)(c) (TAS) Public Trustee Act 1930 s 24(d) (WA) Trustees Act 1962 s 15(2)(c). 4 (QLD) Trusts Act 1973 s 19(2)(h) (TAS) Public Trustee Act 1930 s 24(i) (WA) Trustees Act 1962 s 15(2)(h). 5 (SA) Public Trustee Act 1995 s 17.6 An approved corporation is a corporation approved in accordance with (VIC) Trustee Act 1958 s 71(2).7 Ibid s 71. The paragraph below is current to 18 April 2009 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [295-340] Advisory trustee In Queensland, Tasmania and Western Australia, where an advisory trustee is appointed to act with any trustee, the advisory trustee does not have any trust property or powers of management or administration. Consequently, an advisory trustee does not have the power to grant or create a security interest. Where the Public Trustee or other trustee, which the advisory trustee is appointed to advise, has the power to grant or create a security interest, that trustee does not require the advisory trustees consent to the exercise of that power.1 Notes 1 (QLD) Public Trustee Act 1978 s 41 (TAS) Public Trustee Act 1930 s 22 (WA) Public Trustee Act 1941 ss 21, 22; (WA) Trustees Act 1962 s 14. There are no general statutory provisions in the Australian Capital Territory, the Northern Territory, New South Wales and South Australia for appointment of advisory trustees, but nothing to prevent a settlor establishing a similar arrangement by the terms of the deed establishing the trust. In Victoria, there is provision for appointment of an advisory trustee where the trustee is a State Trustee: (VIC) State Trustees (State Owned Company) Act 1994 s 9. See also trusts [430-3150]. The paragraph below is current to 18 April 2009 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations

[295-345] Trustees of trust for sale A trust for sale may be created expressly, usually by will, or by operation of law.1 The trustee is directed to sell the trust property,2 although there is generally a power to postpone sale,3 invest the proceeds and hold the resultant fund upon the same trusts. Pending sale, the trustee is directed to hold the income of the trust on those trusts. Unless the instrument creating the trust confers on the trustee a power to mortgage the trust property, the trustee does not, except where the position is altered by statute, have such a power.4 In New South Wales, subject to any direction to the contrary in the disposition on trust for sale, trustees for sale have, in relation to the land during postponement of sale, the powers of management conferred by the legislation during a minority.5 In Queensland, the trustee of a trust for sale has the same powers as any other trustee.6 In Victoria, land held on trust for sale is not settled land within the meaning of the (VIC) Settled Land Act 1958 (the Act), even if it is limited to a life tenant and remainderman7 or would otherwise be within a settlement for the purposes of that Act, but trustees for sale of land are given, by statute, the powers of a life tenant and of a trustee under that Act,8 including the power to grant a mortgage.9 In the case of a trust for sale, however, these powers are exercisable by the trustee to the exclusion of any life tenant or other limited owner who might be entitled under the trust instrument, but are only exercisable if any consents required for sale are given.10 If the necessary consents cannot be obtained, any person interested may apply for a court order to give effect to the proposed transaction.11 Notes 1 See further trusts [430-4025].2 This is, as a matter of practice, usually included in the will creating a trust for sale. There is also a statutory power in most jurisdictions: (ACT) Trustee Act 1925 s 26 (the statute does not direct the sale, but does give the trustee for sale the power to sell all or any part of the trust property) (NT) Trustee Act 1893 (SA) s 14 (NSW) Trustee Act 1925 s 27B (QLD) Trusts Act 1973 s 32 (VIC) Trustee Act 1958 s 13(5) (WA) Trustees Act 1962 s 27. There are no equivalent provisions in South Australia and Tasmania. 3 This is also, as a matter of practice, usually included in the will creating a trust for sale. There is also a statutory power in some jurisdictions (in the absence of a contrary intention): (ACT) Trustee Act 1925 s 27B (NSW) Trustee Act 1925 s 27B (QLD) Trusts Act 1973 s 32(1)(c) (VIC) Property Law Act 1958 s 32 (WA) Trustees Act 1962 s 27(5).

There are no equivalent provisions in the Northern Territory, South Australia and Tasmania. 4 As to the power of trustees generally to grant a mortgage see [295-315].5 (NSW) Conveyancing Act 1919 s 66D(1). As to the powers of a trustee for a minor see ibid s 151C(2). This includes a power to mortgage for the benefit of the infant: Re Newton (1936) 53 WN (NSW) 117 . See generally trusts [430-4680]-[430-4775]. This can lead to the trustee having a statutory power to mortgage: see further [295-320]. 6 (QLD) Trusts Act 1973 s 5 (definition of trustee). See also [295-315]-[295-325].7 (VIC) Settled Land Act 1958 s 9. As to settled land legislation in Victoria see [295-240]-[295-265].8 (VIC) Property Law Act 1958 s 35(1).9 The powers of a tenant for life include the powers of management conferred by (VIC) Settled Land Act 1958 s 102. These powers apply if and so far as a contrary intention is not expressed in the trust instrument: ibid s 103.10 (VIC) Property Law Act 1958 s 35(1).11 Ibid s 37. See, for example, Re Tabone (decd) [1968] VR 168 ; (VIC) Trustee Act 1958 s 63. See Re Beales Settlement Trusts [1932] 2 Ch 15; [1931] All ER Rep 637 . The paragraph below is current to 18 April 2009 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [295-350] Protection of mortgagee Where the trustee has the power to raise money on mortgage, the proposed security holder is excused by statute in some jurisdictions from ensuring that the moneys secured by the mortgage are required by the trust, are no more than are required and are applied for the purposes of the trust.1 Notes 1 (ACT) Trustee Act 1925 ss 39, 82(8), 83(3) (NSW) Trustee Act 1925 ss 39, 82A(3) (QLD) Trusts Act 1973 s 46 (VIC) Trustee Act 1958 s 21 (WA) Trustees Act 1962 s 44. There are no equivalent provisions in the Northern Territory, South Australia and Tasmania except in the very limited case where the money is raised by mortgage to fund renewal of a lease: (NT) Trustee Act 1893 (SA) s 19(2) (SA) Trustee Act 1936 s 26(2) (TAS) Trustee Act 1898 s 22(2). The paragraph below is current to 18 April 2009 [295-355] Form of security instrument by trustee A trustee or other fiduciary owner who provides a security interest in or over property comprising the trust estate does not usually intend to personally covenant to pay the money borrowed.1 Consequently, the trustees personal covenant to pay is usually expressly limited to payments out of money coming into the trustees

hands as trustee2 because a covenant by a trustee to pay out of a trust fund prevents a personal liability being implied.3 Similarly, a covenant as trustee, but not otherwise, does not impose a personal liability.4 Where the security interest takes the form of a conveyance by way of mortgage the demise will imply a covenant by the trustee to pay unless it is specifically excluded.5 A clause should be included in the instrument creating or granting the security to ensure there is no consolidation with mortgages given by the trustee other than in the trustees capacity as trustee of the same trust.6 A security instrument in favour of trustees should contain a statement that the money is advanced out of a joint account because equity otherwise assumes a tenancy in common.7 Notes 1 This is frequently not the case where a corporate trustee is involved and the beneficiaries of the trust are, or are related to, the directors and/or the shareholders of the corporate trustee.2 Re Robinsons Settlement; Gant v Hobbs [1912] 1 Ch 717 at 729 per Buckley LJ. As to the significance of personal covenants in the discharge of a mortgage see [295-8375]-[295-8395].3 Mathew v Blackmore (1857) 1 H & N 762; 156 ER 1409 at 1412 per Pollock CB.4 Re Robinsons Settlement; Gant v Hobbs [1912] 1 Ch 717 at 728-9 per Buckley LJ.5 Yates v Aston (1843) 4 QB 182; 114 ER 866.6 Thorne v Thorne [1893] 3 Ch 196 ; Cruickshank v Duffin (1872) LR 13 Eq 555.7 This results from the equitable maxim equity leans against joint tenancies which arises because joint tenancies favour the person of longevity. As to joint tenancies generally see real property [355-11505]-[355-11540].

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[Halsbury's Laws of Australia]

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(II) Adequacy

The paragraph below is current to 01 June 2006 [110-635] Consideration need not be adequate Sufficiency of consideration is a synonym for the validity or effectiveness of consideration, and consideration may be sufficient without being adequate.1 Adequacy of consideration therefore denotes adequacy in value of a consideration by comparison with the value of the promise which it is said to support, and the sufficiency rule implies that the inadequacy of a propounded consideration is no ground of objection to the validity of the consideration.2 This is because a propounded consideration which satisfies all the tests which it must satisfy in order to make a promise legally binding is necessarily sufficient and that is all that is legally required.3 Notes 1 See further [110-645] (nominal consideration).2 See, for example, Alexander v Rayson [1936] 1 KB 169 at 182; [1935] All ER Rep 185 , CA; Barba v Gas & Fuel Corp of Victoria (1976) 136 CLR 120; 41 LGRA 19; 12 ALR 649; 51 ALJR 219 ; Anangel Atlas Compania Naviera SA v Ishikawajima-Harima Heavy Industries Co Ltd (No 2) [1990] 2 Lloyds Rep 526 at 545 per Hirst J, QB. A fortiori adequacy of consideration is not relevant to promises under seal: see [110-570].3 See [110-625]. The paragraph below is current to 01 June 2006 [110-640] Situations where adequacy is relevant Although the law governing the formation of contracts is not concerned with the adequacy of consideration, and inadequacy as such does not negate the validity of consideration,1 it may be relevant to other issues, including: (1) whether the promise was obtained by economic duress;2 (2) whether the promise was obtained by undue influence;3 (3) whether the promise was obtained by unconscionable conduct;4 (4) the enforceability of a promise made in restraint of trade;5 and (5) the availability of the remedy of specific performance.6 In cases where, for the purposes of equitable relief, the issue is whether valuable consideration has been provided, the issue is one of substance not form.7 Notes 1 See [110-635]. See also Woolworths Ltd v Kelly (1991) 22 NSWLR 189 at 193; 4 ACSR 431; 9 ACLC 539 per Kirby P, CA(NSW) (relevance to intention to contract and relevance of adequacy to wrong or moral fault).2 See, for example, [110-5720].3 See, for example, [1105810].4 See, for example, [110-5910].5 See, for example, Bridge v Deacons (a firm) [1984] AC 705; [1984] 2 All ER 19 (restraint in solicitors partnership agreement valid where the defendant

was owner of a share in the goodwill of the partnership even though the quantum of consideration provided for was on the low side because it could be justified and was not insignificant). See generally [110-7210].6 See, for example, Jefferys v Jefferys (1841) Cr & Ph 138; [1835-42] All ER Rep 81; (1841) 41 ER 443 . As to specific performance see [110-11840]-[110-11895].7 On whether a trustee provides consideration in relation to a transfer of the bare legal estate by an agreement to act as trustee see Corin v Patton (1990) 169 CLR 540 at 549 per Mason CJ and McHugh J, at 577 per Deane J; 92 ALR 1 at 6, 27; 64 ALJR 256; (1990) NSW ConvR 55-536 : HCK China Investments Ltd v Solar Honest Ltd (1999) 165 ALR 680 at 718-9 per Hely J; [1999] FCA 1156; BC9905058 . The paragraph below is current to 01 June 2006 [110-645] Nominal consideration It follows from the lack of concern with adequacy of consideration1 that a purely nominal consideration will suffice to make a promise binding.2 Whether the promisor actually places a value on what is objectively a nominal consideration is also irrelevant to the efficacy of the consideration.3 Notes 1 See [110-635].2 See, for example, Thomas v Thomas (1842) 2 QB 851; 114 ER 330 (executors agreement to transfer life interest supported by consideration in form of promise to pay 1 per annum and to keep premises in repair); Niesmann v Collingridge (1921) 29 CLR 177; 27 ALR 209; 21 SR (NSW) 500 (option on land bought for sixpence); Barnett v Ira L & AC Berk Pty Ltd (1952) 52 SR (NSW) 268 (heavily qualified and thus minimal obligations undertaken by the seller of a motor car sufficient to support a promise to buy); Cavallari v Premier Refrigeration Co Pty Ltd (1952) 85 CLR 20; 26 ALJR 187; BC5200040 (option on property to be sold for 32,000 bought for one shilling); Vantage Navigation Corp v Suhail and Saud Bahwan Building Materials LLC (The Alev) [1989] 1 Lloyds Rep 138 at 147 per Hobhouse J, QB (appointment of gratuitous agents was, technically, consideration). Contrast the position where a statute passed to protect creditors requires good or valuable consideration. See, for example, Official Trustee in Bankruptcy v Martin (1990) 24 FCR 504; 100 ALR 541 at 547 , Fed C of A, Full Court (nominal consideration is not valuable consideration in context of avoidance of contract against trustee in bankruptcy); Sheahan v Workers Rehabilitation and Compensation Corp (1991) 58 SASR 119; 101 ALR 431; 103 FLR 330; (preferential payment under bankruptcy legislation); Official Trustee in Bankruptcy v Mitchell (1992) 38 FCR 364; 110 ALR 484 at 491; 16 Fam LR 87 , Fed C of A, Full Court (valuable consideration in context of bankruptcy legislation where sums amounting to two-thirds of the value of a property were paid). See also [110-625].3 See, for example, Chappell & Co Ltd v Nestl Co Ltd [1960] AC 87; [1959] 2 All ER 701 (where manufacturers promised to sell record in return for payment of specified sum and production of wrappers from their chocolate, both formed part of consideration notwithstanding evidence that wrappers thrown away on receipt). However, extrinsic evidence is admissible to prove that a substantial consideration is the real consideration where no consideration, or a nominal consideration, is expressed in an instrument: see Barba v Gas & Fuel Corp of Victoria (1976) 136 CLR 120 at 131-2; 41 LGRA 19; 12 ALR 649; 51 ALJR 219 ; Pao On v Lau Yiu Long [1980] AC 614 at 631; [1979] 3 All ER 65; [1979] 3 WLR 435 per the court, PC; Yaroomba Beach Development Co Pty Ltd v Coeur de Lion Investments Pty Ltd (1989) 18 NSWLR 398 at 407 ; Himbleton Pty Ltd v Kumagai (NSW) Pty Ltd (1991) 29 NSWLR 44 at 51-2; 5 BPR 11,596; (1992) NSW ConvR 55-618 per Giles J; Lilley v Midland Brick Co Pty Ltd (1992) 9 WAR 339 at 343 per Pidgeon J (Roland and Owen JJ agreeing), SC(WA), Full Court. See further [110-2330].

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(II) Property of the Bankrupt The paragraph below is current to 21 November 2011 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [50-795] Scope The property of the bankrupt that vests in the trustee is, subject to certain exemptions,1 all real and personal property (whether in Australia or elsewhere) of the bankrupt and includes any estate, interest or profit arising out of or incident to such property, whether present or future, vested or contingent.2 The breadth of this definition means that property interests recognised at law and equity, unless specifically exempted, vest in the trustee in bankruptcy.3 Property interests that have been recognised by the courts in bankruptcy proceedings include the bankrupts books and records,4 the bankrupts knowledge of a secret manufacturing formula,5 goodwill attached to a business,6 certain licences7 and choses in action, such as debts,8 contracts,9 actions for breach of contract, 10 the right to the proper administration of a deceased estate in which the bankrupt is a beneficiary11 and the right to set aside a default judgment.12 In contrast, rights that are personal to the bankrupt, such as the performance of contractual rights dependent on the personal skill or performance of the bankrupt,13 personal as opposed to local goodwill,14 personal rights to payment under legislation15 or personal claims to a superannuation fund,16 are not property and so do not pass to the trustee. Other rights which have been held not to be property rights include a potential claim under a discretionary trust,17 the right to nominal damages in a property tort action,18 the right to make an application under testator family maintenance legislation19 and the right to appeal against an adverse judgment.20 The property interests that vest in the trustee in bankruptcy are the same rights, no more and no less, as held by the bankrupt. This means that any liabilities or equities that affect the property of

the bankrupt remain with the trustee.21 Thus, the trustee takes the property subject to the claims of assignees22 or secured creditors23 and subject to rights of rescission a purchaser may have against the bankrupt.24 Likewise, if the contract inherited by the trustee is executory, the trustee must be prepared to perform the obligations remaining under the contract if he or she wishes to claim the benefits of the contract.25 If the bankrupt holds property as a joint tenant, the bankrupts share vests in the trustee in bankruptcy as a tenant in common.26 Notes 1 As to property that vests in the trustee generally see [50-790]. As to property not divisible among creditors see [50-825].2 (CTH) Bankruptcy Act 1966 s 5(1) (definition of property).3 Pridmore v Magenta Nominees Pty Ltd (1999) 161 ALR 458; [1999] FCA 152; BC9900551 . As to real property generally see real property. As to personal property generally see personal property.4 Griffin v Pantzer (2004) 137 FCR 209; 207 ALR 169; [2004] FCAFC 113; BC200402587 .5 Re Keene [1922] 2 Ch 475; [1922] All ER Rep 258 , CA.6 Re Lazarus (decd) (1940) 11 ABC 249 ; Re Hunter (1953) 16 ABC 129 , Fed C of Bkty.7 Re Norris; Ex parte Official Receiver (1965) 6 FLR 375 , Fed C of Bkty. Compare Jack v Smail (1905) 2 CLR 684; 11 ALR 372 .8 Re Edelsten; Donnelly v Edelsten (1988) 84 ALR 547; 19 ATR 1863 , Fed C of A.9 Official Receiver in Bankruptcy v Henn [1982] VR 362; (1981) 40 ALR 569; 61 FLR 410 .10 Beckham v Drake (1849) 2 HL Cas 579; 9 ER 1213 ; Re Camberwell Motors Pty Ltd (in liq) [1926] VLR 539; [1926] ALR 421 ; Nyssen v Minerva Centre Ltd (1940) 57 WN (NSW) 112 .11 Re Pevsner; Ex parte Trustee in Bankruptcy (1983) 68 FLR 254 , Fed C of A; Silvia v Thomson (1989) 87 ALR 695 , Fed C of A. See also Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306; 96 ALR 327; 64 ALJR 651 .12 W R Henry & Son v Hodge [1963] VR 111; (1961) 20 ABC 87 .13 Gibson v Carruthers (1841) 8 M & W 321; 151 ER 1061; Beckham v Drake (1849) 2 HL Cas 579 at 617 per Wightman J, at 627 per Mr Baron-Parke, at 639 per Lord Brougham; 9 ER 1213 ; Knight v Burgess (1864) 33 LJ Ch 727; 10 LT 90; Bailey v Thurston & Co Ltd [1903] 1 KB 137; (1902) 88 LT 43 ; Millane v Shire of Heidelberg [1936] VLR 8; [1936] ALR 7 ; Moore v Collins [1937] SASR 195 ; Perfection Dairies Pty Ltd v Finn (2006) 151 IR 197; [2006] NSWIRComm 137 .14 See, for example, Re Hunter (1953) 16 ABC 129 , Fed C of Bkty.15 See, for example, Luxton v Luxton [1968] VR 540; [1969] ALR 93; (1968) 12 FLR 382 ; Taylor v Secretary, Department of Social Security (1988) 18 FCR 322; 14 ALD 655; 79 ALR 327 , Fed C of A; Federal Commissioner of Taxation v Official Receiver (1956) 95 CLR 300; [1956] ALR 643; (1956) 18 ABC 3 ; Re Rapley; Ex parte Official Receiver (1934) 7 ABC 241. Compare Re Buckle; Ex parte Ogilvie [1970] ALR 717; (1969) 15 FLR 460 , Fed C of Bkty; Re Mondin; Ex parte Bradshaw (as trustee of the property of Mondin) (a debtor) (1985) 6 FCR 430; 60 ALR 439 , Fed C of A.16 Re Coram; Ex parte Official Trustee in Bankruptcy v Inglis (1992) 36 FCR 250; 109 ALR 353 .17 Re Coleman; Henry v Strong (1888) 39 Ch D 443; 60 LT 127 , CA.18 Re Wyman (decd); Ex parte Official Receiver v Pertzel (1958) 20 ABC 1 , Fed C of Bkty.19 Coffey v Bennett [1961] VR 264 ; McLeod v Johns [1981] 1 NSWLR 347 , SC(NSW).20 See Cummings v Claremont Petroleum NL (1996) 185 CLR 124; 137 ALR 1; 70 ALJR 616 ; Khadpekar v Official Trustee in Bankruptcy (No 2) (2009) 175 FCR 247; 107 ALD 373; [2009] FCA 244; BC200901651 .21 Re Clarke; Ex parte Beardmore [1894] 2 QB 393 ; Whyte v Williams (1903) 29 VLR 69; 9 ALR 98 .22 Smith v Perpetual Trustee Co Ltd (1910) 11 CLR 148; 11 SR (NSW) 13; 17 ALR 133 ; Re H Dengate and Son (1921) 21 SR (NSW) 619; 38 WN (NSW) 158 , SC(NSW).23 Burns v Stapleton (1959) 102 CLR 97; 33 ALJR 157; BC5900410 ; Hill v ANZ Banking Group Ltd (1974) 4 ALR 634 sub nom Re Hill (1974) 23 FLR 329 , Fed C of Bkty.24 Tilley v Bowman Ltd [1910] 1 KB 745; [1908-10] All ER Rep 952; (1910) 102 LT 318 .25 As to the rights of a trustee in bankruptcy to disclaim certain contracts see [50-1060]-[50-1080].26 Official Receiver in Bankruptcy v Henn [1982] VR 362; (1981) 40 ALR 569; 61 FLR 410 . The paragraph below is current to 21 November 2011 To update legislation see ACL Legislation

For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [50-800] Alteration of rights on bankruptcy It is a fraud on the bankruptcy laws for parties to provide that property that has already vested in the bankrupt is to divest or be forfeited on the occurrence of bankruptcy,1 or that security is to be given to a creditor,2 or an existing security is to be increased, in the event of the debtors bankruptcy.3 Such provisions are void as being contrary to public policy.4 Provisions that merely qualify or limit the property interest taken, even though the qualification or limitation is related to the event of bankruptcy, do not constitute a fraud on the bankruptcy laws.5 Thus, provision that property must be held by the recipient until the recipients bankruptcy, on which event it must pass to another,6 or that a life interest in a trust fund must determine in the event of bankruptcy of the interest holder,7 has been held not to constitute a fraud on the bankruptcy laws. However, a bankrupt cannot qualify his or her own interest in this way8 and in all cases such provisions are construed strictly.9 In addition to these common law principles, the (CTH) Bankruptcy Act 1966 (the Act) also invalidates terms in certain agreements that attempt to modify the provisions of the agreements on the commission of an act of bankruptcy or on the onset of insolvency proceedings under the Act. A provision in an agreement for the sale, lease, license or hire purchase of property is void if it purports to terminate or modify the contract, or if it allows repossession of the property, in the event of the debtors bankruptcy, the commission of an act of bankruptcy or the entering into of a personal insolvency agreement under Part X of the Act.10 A provision in a bill of sale, mortgage, charge or lien is void if it purports to affect the operation of such securities or if it enables a power or remedy to be exercised in the event of the debtors bankruptcy, the commission of an act of bankruptcy or the entering into of a personal insolvency agreement under Part X of the Act.11 Similarly, a provision in the governing rules of a provident, benefit, superannuation, retirement or approved deposit fund is void to the extent that it has the effect that, in the event a member becomes a bankrupt, commits an act of bankruptcy or executes a deed of arrangement or assignment under Part X of the Act, a member or depositors interest is cancelled, forfeited, reduced or qualified or that a trustee or other person may detrimentally affect the interest of a member or depositor.12 A provision of a retirement savings account (an RSA)13 is void to the extent that it has the effect that, should the RSA holder become bankrupt, commit an act of bankruptcy or execute a personal insolvency agreement under the Act, then:14 (1) any part of the amount of money a bankrupt holds in an RSA is cancelled, forfeited, reduced or qualified; or (2) the provider of the RSA is empowered to exercise a discretion relating to such an amount to the detriment of an RSA holder. A provision of a trust deed is void to the extent that it has the effect of:15 (1) cancelling, reducing or qualifying a beneficiarys interest under the trust; or (2)

allowing the trustee to exercise a discretion to the detriment of a beneficiarys interest, where the beneficiary becomes bankrupt, commits an act of bankruptcy or executes a deed of assignment or arrangement under the Act. Notes 1 Whitmore v Mason (1861) 2 John & H 204; 5 LT 631; 70 ER 1031 ; Collins v Barker [1893] 1 Ch 578; (1893) 68 LT 572 ; Re Ashton; Ballard v Ashton [1920] 2 Ch 481; (1920) 124 LT 374 ; Re MacKay; Associated Securities (SA) Ltd v Official Receiver [1972-73] ALR 1116; (1972) 20 FLR 147 ; Caboche v Ramsay (1993) 119 ALR 215; 27 ATR 479 , Fed C of A, Full Court.2 Ex parte Mackay; Ex parte Brown; Re Jeavons (1873) LR 8 Ch App 643; 28 LT 828; 21 WR 664.3 Ex parte Jackson; Re Bowes (1880) 14 Ch D 725; 43 LT 272; 29 WR 253 , CA; Re Johns; Worrell v Johns [1928] Ch 737; (1928) 139 LT 333 .4 Re Ashton; Ballard v Ashton [1920] 2 Ch 481; (1920) 124 LT 374 .5 Trustee of the property of Donovan v Stock Exchange of Melbourne Ltd [1975] VR 139; (1974) 4 ALR 340; 24 FLR 147 .6 Sharp v Cosserat (1855) 20 Beav 470; 52 ER 684; Joel v Mills (1857) 3 K & J 458; 69 ER 1189; Nixon v Verry (1885) 29 Ch D 196; 53 LT 18 ; Re Solomon (1908) SALR 107; Re Salom; Salom v Salom [1924] SASR 93 ; Caboche v Ramsay (1993) 119 ALR 215; 27 ATR 479 , Fed C of A, Full Court.7 Re Laye; Turnbull v Laye [1913] 1 Ch 298; (1913) 108 LT 324 ; Re Clark; Clark v Clark [1926] Ch 833; (1925) 135 LT 666 .8 Wilson v Greenwood (1818) 1 Swan 471; [1814-23] All ER Rep 173; (1818) 36 ER 469 ; Ex parte Jay; Re Harrison (1880) 14 Ch D 19; 42 LT 600 , CA; Mackintosh v Pogose [1895] 1 Ch 505; (1895) 72 LT 251 ; Whyte v Williams (1903) 29 VLR 69; 9 ALR 98 .9 Re Greenwood; Sutcliffe v Gledhill [1901] 1 Ch 887; (1901) 84 LT 118 ; Avison v Homes (1861) 30 LJ Ch 564; 4 LT 617; 9 WR 550. See also Re Carew; Carew v Carew [1896] 1 Ch 527 (affirmed Re Carew; Carew v Carew [1896] 2 Ch 311; (1896) 74 LT 501; 44 WR 700 , CA); Re Harvey; Ex parte Pixley v Harvey (1889) 60 LT 710; 37 WR 620; Re Riggs; Ex parte Lovell [1901] 2 KB 16; (1901) 84 LT 428 ; Re Griffiths; Jones v Jenkins [1926] 1 Ch 1007; (1926) 136 LT 57 .10 (CTH) Bankruptcy Act 1966 s 301.11 Ibid s 302. As to mortgage, charge or lien generally see [50-35].12 Ibid s 302A.13 RSA and RSA holder have the same meanings as in the (CTH) Retirement Savings Accounts Act 1997 : (CTH) Bankruptcy Act 1966 s 5(1).14 Ibid s 302AB.15 Ibid s 302B. The paragraph below is current to 21 November 2011 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [50-805] Overseas property The property which vests in the trustee in bankruptcy is stated by the (CTH) Bankruptcy Act 1966 to include all property owned by the debtor whether situated in Australia or overseas.1 However, whether overseas property vests in the trustee will also depend on principles of private international law.2 Property available to the trustee may also be limited by a concurrent but prior overseas bankruptcy of the bankrupt. That is, the prior bankruptcy may have resulted in a divestiture of the bankrupts property. For this purpose a distinction is made between the bankrupts movable and immovable property. Immovable property in Australia is unaffected by a foreign bankruptcy.3 Movable property, however, vests in the trustee in bankruptcy as if a voluntary assignment of the property had taken place in accordance with Australian law and takes effect subject to that law.4 This is the case at least where the debtor had a connection with the forum in which the bankruptcy occurred.5 However, it has been held that after acquired property6 is not subject to the foreign bankruptcy where the bankrupt was no longer domiciled in that country.7 Notes

1 (CTH) Bankruptcy Act 1966 ss 5(1) (definition of property), 58. Under ibid s 29(4) the court has power to request the assistance of a foreign court which has jurisdiction in bankruptcy, and this power may be used to recover overseas property: Re Dunn and Edwards [1936] QWN 14; (1935) 8 ABC 168 ; Re Livesey; Ex parte Richardson (1946) 14 ABC 59; Re Ayres; Ex parte Evans (1981) 34 ALR 582; 51 FLR 395 ; Clunies-Ross v Totterdell (1988) 20 FCR 358; 98 ALR 245 . For cross-border insolvencies see [50-2430].2 See Re Doyle; Ex parte Brien v Doyle (1993) 41 FCR 40; 112 ALR 653; BC9304635 . See generally conflict of laws.3 Re Doyle; Ex parte Brien v Doyle (1993) 41 FCR 40; 112 ALR 653; BC9304635 ; Cockerell v Dickens (1840) 3 Moo PCC 98; 13 ER 45 ; Re Levys Trusts (1885) 30 Ch D 119 . A trustee may be appointed, however, to sell and receive the proceeds of sale: Re Kooperman [1928] B & CR 49; (1928) 72 Sol Jo 400 ; Re Osborn; Ex parte Trustee [1931-32] B & CR 189 ; Re Young (decd) [1955] St R Qd 254 .4 Australian Mutual Provident Society v Gregory (1908) 5 CLR 615; 14 ALR 129 ; Hall v Woolf (1908) 7 CLR 207; 15 ALR 60 ; Union Bank v Tuttle (1889) 15 VLR 258 ; Anantapadmanabhaswami v Official Receiver of Secunderabad [1933] AC 394; (1933) 149 LT 54 , PC.5 Re Artola Hermanos; Ex parte Chle (1890) 24 QBD 640; 62 LT 781 , CA; Re Anderson [1911] 1 KB 896; (1911) 104 LT 221 .6 See [50-790].7 Hall v Woolf (1908) 7 CLR 207; 15 ALR 60 . This may no longer represent the law: see Radich v Bank of New Zealand (1993) 45 FCR 101; 116 ALR 676; BC9305003 .

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[Halsbury's Laws of Australia]

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(II) Declared Inability and Inability by Promisors Act The paragraph below is current to 15 December 2011 [110-9325] Inability based on words or conduct An express declaration by a promisor of the promisors inability to perform all (or substantially all) contractual obligations is a repudiation by

reason of the promisors words.1 Such a declaration may alternatively be inferred from conduct, and even a promisor who does not expressly state an inability to perform, may repudiate by words or conduct from which the only reasonable inference is an inability to perform the contract.2 Where the contract relates to a specific subject matter, or if there is a personal element in performance, an act by which the promisee disables himself or herself from transferring the subject matter, or from performing the contract personally, will amount to a repudiation.3 Although the rule has its origin in cases dealing with contracts to transfer interests in property,4 it is not restricted to such cases.5 If the promisors conduct does not relate to all, or substantially all, of the promisors obligations, the promisee must show that the act relied upon makes it impossible for the promisor to perform except in a way which is substantially different from that envisaged by the parties.6 Notes 1 See, for example, W & J Investments Ltd v Bunting [1984] 1 NSWLR 331 (declaration of inability to pay rent under goods lease). See also Hoad v Swan (1920) 28 CLR 258 at 264; 21 SR (NSW) 161; 37 WN (NSW) 184 ; Winterton Constructions Pty Ltd v Hambros Australia Ltd (1992) 39 FCR 97; 111 ALR 649 at 662; (1993) ATPR 41-205 per Hill J.2 Universal Cargo Carriers Corp v Citati [1957] 2 QB 401 at 437; [1957] 2 All ER 70 per Devlin J (profession, by words or conduct, of inability is by itself enough to constitute renunciation). See also Hoad v Swan (1920) 28 CLR 258 at 264; 21 SR (NSW) 161; 37 WN (NSW) 184 ; Bell v Scott (1922) 30 CLR 387 at 395-6; 28 ALR 238; 22 SR (NSW) 584; 39 WN (NSW) 123 ; Harold Wood Brick Co Ltd v Ferris [1935] 2 KB 198 at 205-6; [1935] All ER Rep 603 .3 For example, if A agrees to convey a particular piece of land to B, but instead conveys it to C, As act can be treated by B as a repudiation because it makes it impossible for A to perform the contractual obligation to convey the land to B. See Synge v Synge [1894] 1 QB 466; [1891-94] All ER Rep 1164 (contract to transfer life interest by will); Schaefer v Schuhmann [1972] AC 572; [1972-73] ALR 501; (1972) 46 ALJR 82; [1972] 1 All ER 621 , PC (contract to transfer property by will); Barns v Barns (2003) 214 CLR 169; 196 ALR 65 at 93; [2003] HCA 9; BC200300694 per Gummow and Hayne JJ (action for damages for anticipatory breach may lie in respect of a covenant to leave particular property by will).4 See, for example, Sir Anthony Mains Case (1596) 5 Co Rep 20b; 77 ER 80 (transfer of land to third party); Bowdell v Parsons (1808) 10 East 359; 103 ER 811 (repudiation of contract to sell specific stack of hay by sale to third party); Lovelock v Franklyn (1846) 8 QB 371; 115 ER 916 (lease to third party); Synge v Synge [1894] 1 QB 466; [1891-94] All ER Rep 1164 (contract to transfer life interest by will transfer to third party a repudiation); Schaefer v Schuhmann [1972] AC 572 at 586; [1972-73] ALR 501; (1972) 46 ALJR 82; [1972] 1 All ER 621 , PC (contract to transfer property by will transfer by testator to third party during lifetime is a repudiation). See also Roadshow Entertainment Pty Ltd v ACN 053 006 269 Pty Ltd Receiver & Manager Appointed (formerly CEL Home Video Pty Ltd) (1997) 42 NSWLR 462 at 477; (1997) Aust Contract Reports 90-086; BC9705097 per the Court of Appeal (transfer of business assets amounted to repudiation); Barns v Barns (2003) 214 CLR 169; 196 ALR 65 at 93; [2003] HCA 9; BC200300694 per Gummow and Hayne JJ (action for damages for anticipatory breach may lie in respect of a covenant to leave particular property by will).5 See, for example, Warburton v Storr (1825) 4 B & C 103; 107 ER 997 (rescission of arbitrators authority was repudiation of agreement to arbitrate); Short v Stone (1846) 8 QB 358; 115 ER 911 (inability to perform a contract to marry); Ex parte Chalmers (1873) LR 8 Ch App 289 (bankruptcy); Brace v Calder [1895] 2 QB 253 (voluntary liquidation of an employer a repudiation of contract of employment); Ogdens Ltd v Nelson [1905] AC 109; [1904-7] All ER Rep Ext 1658 (repudiation of agreement to distribute share in business profits by voluntary liquidation and sale of business); Measures Bros Ltd v Measures [1910] 2 Ch 248 at 259 (winding up of company and abolition of defendants position was repudiation of employment contract); Roadshow Entertainment Pty Ltd v ACN 053 006 269 Pty Ltd Receiver & Manager Appointed (formerly CEL Home Video Pty Ltd) (1997) 42 NSWLR 462 at 477; (1997) Aust Contract Reports 90-086; BC9705097 , CA(NSW) (transfer of business assets amounted to

repudiation). Compare Reigate v Union Manufacturing Co (Ramsbottom) Ltd [1918] 1 KB 592 at 601, 604, 606-7; [1918-19] All ER Rep 143 , CA (voluntary liquidation on insolvency may be repudiation of agency contract); Re Palmdale Insurance Ltd (in liq) [1982] VR 921 (facts which provoked winding up of insurance company showed its inability to perform and amounted to repudiation).6 See, for example, Duke of St Albans v Shore (1789) 1 Hy Bl 270; 126 ER 158 (repudiation by vendor who agreed to sell land together with its timber but felled the timber prior to conveyance: the stock of timber was an essential element of the contract); Ellen v Topp (1851) 6 Exch 424; 155 ER 609 (repudiation by master who ceased to carry on one of the three trades he had undertaken to teach as instruction in each trade was essential); Afovos Shipping Co SA v Pagnan [1983] 1 All ER 449; [1983] 1 WLR 195 at 203 per Lord Diplock (the other members of the House of Lords agreeing) (requirement of fundamental breach); Foran v Wight (1989) 168 CLR 385; 88 ALR 413; 64 ALJR 1 (statement by vendors of land that they would be unable to settle on date fixed because a right of way which the vendors were required to provide had not been registered, a repudiation because time was of the essence). See further [110-9350].

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[Halsbury's Laws of Australia]

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(3) ASSURANCES AND ASSIGNMENTS (A) Assignments in Equity

This chapter was updated by Maree Sainsbury BA/LLB (Hons), Grad Dip in Legal Practice, PhD (Tas) Senior Lecturer, University of Canberra

Barrister & Solicitor of the Supreme Court of Tasmania and the High Court of Australia

The paragraph below is current to 20 May 2008 [185-415] Overview An assignment is the immediate transfer of an existing proprietary right, vested or contingent, from the assignor to the assignee.1 An equitable assignment is the recognition of such a transfer in equity. There must be a clear, manifest intention to divest the assignor of property and vest it in the assignee.2 The intention is not manifest where it is intended that something else needed to be done before the assignment is complete.3 Notes 1 Norman v FCT (1963) 109 CLR 9 at 26; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J. As to whether there is an immediate disposition see JT Nominees Pty Ltd v Macks (2007) 97 SASR 471; 248 LSJS 306; [2007] SASC 151; BC200703365 .2 William Brandts Sons & Co v Dunlop Rubber Co Ltd [1905] AC 454 at 462; [1904-7] All ER Rep 345 per Lord Macnaghten, PC; Kekewich v Manning (1851) 1 De GM & G 176; 21 LJ Ch 577; 42 ER 519 ; Norman v FCT (1963) 109 CLR 9; [1964] ALR 131; (1963) 37 ALJR 49 ; Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614 at 623-4; [1937] VLR 15; [1936] ALR 198 per Dixon J; Noonan v Martin (1987) 10 NSWLR 402 . The intention could be for an immediate assignment or for an assignment to occur at some future date which is capable of ascertainment: Jenkins v Visualeyes Pty Ltd [2005] ANZ ConvR 395; [2005] VSC 218; BC200504385 .3 NT Power Generation Pty Ltd v Trevor (2000) 23 WAR 482; 18 ACLC 885 ; BC200006331 . The paragraph below is current to 20 May 2008 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [185-420] Voluntary assignment of legal property Equity will recognise a voluntary assignment of legal property assignable at law, even though the legal requirements for assignment of property of the type in question have not been completed, if the intending donor has done everything necessary to effect a transfer of legal title.1 So long as the donee has been equipped to achieve the transfer of legal ownership, the gift is complete in equity.2 Necessary used in this sense means necessary to effect a transfer.3 From the viewpoint of the intending donor, the question is whether what the donor has done is sufficient to enable the legal transfer to be effected without further action on the donors part.4 This is an application of the test in Milroy v Lord5 which requires that in order for a voluntary assignment to be rendered valid and effectual, the settlor must have done everything which, according to the nature of the property comprised in the settlement, was necessary to be done in order to transfer the property and render the settlement binding upon him or her.6 When considering whether the test has been satisfied, it is necessary to consider whether the donee has been given property in, rather than mere possession of, the memorandum of transfer and any necessary title documents considered as pieces of paper.7 Equity enforces the assignment, not by compelling the assignor to do something, but by refusing to allow the assignor to act in a way inconsistent with what he or she has done that is, by restraining the assignor from derogating from the gift. The assignors conscience is bound not by value received but because, as between assignor and assignee, the gift is complete.8 The principle that the court will not assist a volunteer claiming under an imperfect gift applies only as between the volunteer and his or her donor it is not a defence to a

suit by the volunteer against a stranger.9 Once a gift of legal property is complete in accordance with this test and thus binding on the donor, equity will hold the donor to the completed transaction on the footing that the title has been divested and the donee will be in the same position as a volunteer who is the object of a completely constituted trust.10 Notes 1 Corin v Patton (1990) 169 CLR 540 at 559 per Mason CJ and McHugh J, at 582 per Deane J; 92 ALR 1; 64 ALJR 256 (it is whether the donor has done all that is necessary to place the vesting of the legal title within the control of the donee and beyond the recall or intervention of the donor. Once that stage is reached and the gift is complete and effective in equity, the equitable interest in the land vests in the donee and, that being so, the donor is bound in conscience to hold the property as trustee for the donee pending the vesting of the legal title). See also Anning v Anning (1907) 4 CLR 1049 at 1057; 13 ALR 709; 11 ALJ 108 per Griffith CJ; ORegan v Cmr of Stamp Duties [1921] St R Qd 283 ; Scoones v Galvin [1934] NZLR 1004 at 1018 per Myers CJ, Blair and Kennedy JJ (dicta); Brunker v Perpetual Trustee Co (Ltd) (1937) 57 CLR 555 at 600-2; [1937] ALR 349; (1937) 11 ALJ 108 per Dixon J (dicta) (discussing the view of Windeyer J (dicta) in Norman v FCT (1963) 109 CLR 9 at 28-9; [1964] ALR 131; (1963) 37 ALJR 49 ); Cope v Keene (1968) 118 CLR 1 at 6 per Kitto J, at 12 per Taylor J (dicta) sub nom Re Keene (decd); Cope v Keene [1969] ALR 57; (1968) 42 ALJR 169 ; Olsson v Dyson (1969) 120 CLR 365 at 386-7; [1969] ALR 443; (1969) 43 ALJR 77 per Windeyer J (dicta); Taylor v DCT(Cth) (1969) 123 CLR 206 at 213; 43 ALJR 237; 1 ATR 97 per Barwick CJ, Taylor and Menzies JJ; Public Trustee v Sullivan (1945) 46 SR (NSW) 149; 63 WN (NSW) 6 ; Haythorpe v Rae [1972] VR 633 . See further (QLD) Property Law Act 1974 s 200 which adopts Griffith CJs view in Anning v Anning (1907) 4 CLR 1049; 13 ALR 709; 11 ALJ 108 . Following Corin v Patton (1990) 169 CLR 540; 92 ALR 1; 64 ALJR 256 , the view that a valid equitable assignment of legal property assignable at law has been made only if all legal and statutory requirements have been complied with that is, that there is no separate or more liberal category of equitable assignments can no longer be regarded as good law in Australia. For expressions of the view prior to Corin v Patton (1990) 169 CLR 540; 92 ALR 1; 64 ALJR 256 , see Anning v Anning (1907) 4 CLR 1049 at 1069; 13 ALR 709; 11 ALJ 108 per Isaacs J; Scoones v Galvin [1934] NZLR 1004 at 1022 ( dicta); Brunker v Perpetual Trustee Co (Ltd) (1937) 57 CLR 555 at 599; [1937] ALR 349; (1937) 11 ALJ 108 per Dixon J (dicta); Palmer v Monk [1962] NSWR 786 at 789-90; (1961) 80 WN (NSW) 107 per Jacobs J (dicta); Olsson v Dyson (1969) 120 CLR 365 at 368 per Barwick CJ, at 375 per Kitto J (dicta); [1969] ALR 443; (1969) 43 ALJR 77 . See also Blair v Grant (1870) 1 VR (E) 130. Corin v Patton (1990) 169 CLR 540; 92 ALR 1; 64 ALJR 256 followed Motor Auction Pty Ltd v John Joyce Wholesale Cars Pty Ltd (1997) 138 FLR 118 at 119; 8 BPR 15,565; 23 ACSR 647 per Santow J; Benjamin v Leicher (1998) 45 NSWLR 389 at 400; BC9804629 per Cohen J . 2 Corin v Patton (1990) 169 CLR 540 at 559 per Mason CJ and McHugh J, at 582 per Deane J; 92 ALR 1; 64 ALJR 256 . See also Anning v Anning (1907) 4 CLR 1049 at 1057; 13 ALR 709; 11 ALJ 108 per Griffith CJ; ORegan v Cmr of Stamp Duties [1921] St R Qd 283 ; Scoones v Galvin [1934] NZLR 1004 at 1018 per Myers CJ, Blair and Kennedy JJ (dicta); Brunker v Perpetual Trustee Co (Ltd) (1937) 57 CLR 555 at 600-2; [1937] ALR 349; (1937) 11 ALJ 108 per Dixon J (dicta) (discussing the view of Windeyer J (dicta) in Norman v FCT (1963) 109 CLR 9 at 28-9; [1964] ALR 131; (1963) 37 ALJR 49 ); Cope v Keene (1968) 118 CLR 1 at 6 per Kitto J, at 12 per Taylor J (dicta) sub nom Re Keene (decd); Cope v Keene [1969] ALR 57; (1968) 42 ALJR 169 ; Olsson v Dyson (1969) 120 CLR 365 at 386-7; [1969] ALR 443; (1969) 43 ALJR 77 per Windeyer J (dicta); Taylor v DCT(Cth) (1969) 123 CLR 206 at 213; 43 ALJR 237; 1 ATR 97 per Barwick CJ, Taylor and Menzies JJ; Public Trustee v Sullivan (1945) 46 SR (NSW) 149; 63 WN (NSW) 6 ; Haythorpe v Rae [1972] VR 633 . See further (QLD) Property Law Act 1974 s 200 which adopts Griffith CJs view in Anning v Anning (1907) 4 CLR 1049; 13 ALR 709; 11 ALJ 108 .3 Corin v Patton (1990) 169 CLR 540 at 559 per Mason CJ and McHugh J, at 582 per Deane J; 92 ALR 1; 64 ALJR 256 . See also Anning v Anning (1907) 4 CLR 1049 at 1057; 13 ALR 709; 11 ALJ 108 per Griffith CJ; ORegan v Cmr of Stamp Duties [1921] St R

at 1057; 13 ALR 709; 11 ALJ 108 per Griffith CJ; ORegan v Cmr of Stamp Duties [1921] St R Qd 283 ; Scoones v Galvin [1934] NZLR 1004 at 1018 per Myers CJ, Blair and Kennedy JJ (dicta); Brunker v Perpetual Trustee Co (Ltd) (1937) 57 CLR 555 at 600-2; [1937] ALR 349; (1937) 11 ALJ 108 per Dixon J (dicta) (discussing the view of Windeyer J (dicta) in Norman v FCT (1963) 109 CLR 9 at 28-9; [1964] ALR 131; (1963) 37 ALJR 49 ); Cope v Keene (1968) 118 CLR 1 at 6 per Kitto J, at 12 per Taylor J (dicta) sub nom Re Keene (decd); Cope v Keene [1969] ALR 57; (1968) 42 ALJR 169 ; Olsson v Dyson (1969) 120 CLR 365 at 386-7; [1969] ALR 443; (1969) 43 ALJR 77 per Windeyer J (dicta); Taylor v DCT(Cth) (1969) 123 CLR 206 at 213; 43 ALJR 237; 1 ATR 97 per Barwick CJ, Taylor and Menzies JJ; Public Trustee v Sullivan (1945) 46 SR (NSW) 149; 63 WN (NSW) 6 ; Haythorpe v Rae [1972] VR 633 . See further (QLD) Property Law Act 1974 s 200 which adopts Griffith CJs view in Anning v Anning (1907) 4 CLR 1049; 13 ALR 709; 11 ALJ 108 .4 Corin v Patton (1990) 169 CLR 540 at 559 per Mason CJ and McHugh J, at 582 per Deane J; 92 ALR 1; 64 ALJR 256 . See also Anning v Anning (1907) 4 CLR 1049 at 1057; 13 ALR 709; 11 ALJ 108 per Griffith CJ; ORegan v Cmr of Stamp Duties [1921] St R Qd 283 ; Scoones v Galvin [1934] NZLR 1004 at 1018 per Myers CJ, Blair and Kennedy JJ (dicta); Brunker v Perpetual Trustee Co (Ltd) (1937) 57 CLR 555 at 600-2; [1937] ALR 349; (1937) 11 ALJ 108 per Dixon J (dicta) (discussing the view of Windeyer J (dicta) in Norman v FCT (1963) 109 CLR 9 at 28-9; [1964] ALR 131; (1963) 37 ALJR 49 ); Cope v Keene (1968) 118 CLR 1 at 6 per Kitto J, at 12 per Taylor J (dicta) sub nom Re Keene (decd); Cope v Keene [1969] ALR 57; (1968) 42 ALJR 169 ; Olsson v Dyson (1969) 120 CLR 365 at 386-7; [1969] ALR 443; (1969) 43 ALJR 77 per Windeyer J (dicta); Taylor v DCT(Cth) (1969) 123 CLR 206 at 213; 43 ALJR 237; 1 ATR 97 per Barwick CJ, Taylor and Menzies JJ; Public Trustee v Sullivan (1945) 46 SR (NSW) 149; 63 WN (NSW) 6 ; Haythorpe v Rae [1972] VR 633 . See further (QLD) Property Law Act 1974 s 200, which adopts Griffith CJs view in Anning v Anning (1907) 4 CLR 1049; 13 ALR 709; 11 ALJ 108 .5 Milroy v Lord (1862) 4 De GF & J 264; [1861-73] All ER Rep 783; (1862) 45 ER 1185 .6 Milroy v Lord (1862) 4 De GF & J 264 at 274-5; [1861-73] All ER Rep 783; (1862) 45 ER 1185 at 1189 per Turner LJ.7 Noonan v Martin (1987) 10 NSWLR 402 .8 Norman v FCT (1963) 109 CLR 9 at 33; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J (dicta).9 Hodgson v Hunter (1872) 3 VR (E) 61.10 Corin v Patton (1990) 169 CLR 540 at 557-8 per Mason CJ and McHugh J, at 580 per Deane J; 92 ALR 1; 64 ALJR 256 . The paragraph below is current to 20 May 2008 [185-425] Voluntary assignments of Torrens title property Where there is a voluntary assignment of Torrens title property, the donor must have done all that is necessary to effect a legal transfer in order for equity to recognise the transfer.1 A memorandum of transfer, otherwise registrable and given to an intended donee by way of voluntary assignment, can be registered after the death of the transferor without further endorsement or approval by the executor of the estate of that proprietor.2 Delivery of the certificate of title to the donee or, otherwise, production of that title deed to the Land Titles Office for the purpose of registration of the transfer in favour of the donee, while generally essential if the donee is to be armed with the means of completing the gift, may not be necessary where the donee is placed in the position of a person entitled to redeem the mortgage secured on the subject property, thereby obtaining delivery of the certificate of title.3 Possession of the certificate of title for a limited purpose will not suffice to equip the donee with the means of completing the gift.4 Notes 1 As to the test that renders a voluntary assignment valid see [185-420]. See also Costin v Costin (1994) NSW ConvR 55-715; BC9402989; Minister, Aboriginal Land Rights Act 1983 v Aboriginal Corporation of the National Aboriginal Conference [1992] ACL Rep 355 NSW 34.2 Corin v Patton (1990) 169 CLR 540 at 566 per Brennan J, at 591 per Toohey J; 92 ALR 1; 64 ALJR 256 . Compare Cope v Keene (1968) 118 CLR 1 at 7 sub nom Re Keene (decd); Cope v Keene [1969] ALR 57; (1968) 42 ALJR 169 per Kitto J.3 Corin v Patton (1990) 169 CLR 540 at 560-1; 92 ALR 1; 64 ALJR 256 per Mason CJ and McHugh J (whether or not it is correct to say that the production of a certificate of title is necessary to achieve registration of a

transfer of Torrens system property, it is apparent that a gift of such land cannot be regarded as complete in equity while the donor retains possession or control of the certificate of title; that is because it can scarcely be said that the donor has done everything necessary to be done by him or her if he or she has retained the certificate of title, by virtue of the possession of which the gift might well be thwarted).4 Cope v Keene (1968) 118 CLR 1 sub nom Re Keene (decd); Cope v Keene [1969] ALR 57; (1968) 42 ALJR 169 . The paragraph below is current to 20 May 2008 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [185-430] Assignments of choses in action At common law, assignments of choses in action were impossible, as tending to champerty.1 However, equity would assist the assignee to compel the assignor to do whatever was necessary to enable the assignee to get the benefit of the assignment. For example, by compelling the assignor to permit his or her name to be used in an action to recover a debt or by the assignor being restrained from receiving the debt for himself or herself.2 By the nineteenth century, the courts of common law came to imitate the courts of equity so long as the plaintiff was suing in the assignors name.3 Legislation rendered this formality unnecessary when an absolute assignment of a debt or chose in action was made in writing with express notice being given to the debtor, trustee or other person from whom the assignor would have been entitled to receive or claim the debt or chose in action.4 The expression legal chose in action in that legislation applies to equitable choses as well as legal choses.5 A complete chose in action can now be assigned in law.6 Part of a chose in action cannot be assigned at law 7 and can only be assigned in equity,8 including voluntary assignment of a debt. 9 A party taking an assignment of a chose in action is entitled to enforce that debt or other chose.10 An equitable assignment of a legal chose in action can take place without notice being given to the debtor.11 Choses in action which are not yet existing can also be assigned, provided that the assignment is for value.12 Notes 1 As to champerty see contract [110-7135]-[110-7140].2 Fortescue v Barnett (1834) 3 My & K 36; 40 ER 14 ; Re Patrick; Bills v Tatham [1891] 1 Ch 82; (1890) 63 LT 752; 7 TLR 124 , CA.3 Norman v FCT (1963) 109 CLR 9 at 26-7; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J (dicta).4 (ACT) Civil Law (Property) Act 2006 s 205 (NSW) Conveyancing Act 1919 s 12 (QLD) Property Law Act 1974 ss 199, 200 (SA) Law of Property Act 1936 s 15 (TAS) Conveyancing and Law of Property Act 1884 s 86 (VIC) Property Law Act 1958 s 134 (WA) Property Law Act 1969 s 20. See also Calaby Pty Ltd v Ampol Pty Ltd (1990) 71 NTR 1; 102 FLR 186 assignment). (equitable

5 Federal Cmr of Taxation v Everett (1980) 143 CLR 440 at 447; 28 ALR 179; 54 ALJR 196; 10 ATR 608 per Barwick CJ, Stephen, Mason and Wilson JJ.6 Norman v FCT (1963) 109 CLR 9

at 31-4; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J; Shepherd v Cmr of Taxation (Cth) (1965) 113 CLR 385; [1966] ALR 969; (1965) 39 ALJR 351; BC6500390 .7 Williams v Atlantic Assurance Co Ltd [1933] 1 KB 81; [1932] All ER Rep 32 , CA; Re Steel Wing Co Ltd [1921] 1 Ch 349; [1920] All ER Rep 292 ; Stanford v DV Building & Construction Co Pty Ltd [1963] VR 137 .8 (WA) Property Law Act 1969 s 20(3). There are no equivalent provisions in the other jurisdictions. 9 It may be that the word trustee compels the result that assignments of equitable choses are within the statutes but assignments of equitable choses not complying with the statutes may be valid, for example, where notice to the trustee is not required: Anning v Anning (1907) 4 CLR 1049 at 1069; 13 ALR 709; 11 ALJ 108 per Isaacs J. There is authority that the statutes have prevented any voluntary equitable assignment of a legal chose in action being valid now which fails to comply with them even though it would have been valid before the statutes, unless the rule in Milroy v Lord (1862) 4 De GF & J 264 at 274; [1861-73] All ER Rep 783; (1862) 45 ER 1185 at 1189-90 is satisfied: Norman v FCT (1963) 109 CLR 9 at 28-9; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J. Compare Adcock v Jolly (1893) 19 VLR 609; 15 ALT 171 . The statutes do not apply to assignments of part of a debt for these assignments do not require resort to a court of law to be enforced before the statutes, and their purpose of remedying procedural difficulties incidental to resort to law did not apply: see Norman v FCT (1963) 109 CLR 9 at 2930; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J (dicta). As to the general rules for equitable assignments of equitable property and legal property not assignable at law see [185435]-[185-450].10 Commonwealth v Ling (t/as Australian TEFL Centre & Australian TEFL College) (1993) 44 FCR 397; 118 ALR 309 (a right to a refund of student fees paid by Chinese who could not obtain entry visas to Australia).11 Thomas v National Australia Bank Ltd [2000] 2 Qd R 448; [1999] QCA 525; BC9908908 . However, there are advantages or reasons why the debtor or the trustee should be given notice of the assignment: see Meagher R P, Heydon J D and Leeming M J, Meagher Gummow & Lehanes Equity: Doctrines and Remedies, 4th ed, Butterworths, Sydney, 2002, [6-435]. See also ABB Australia Pty Ltd v Cmr of Taxation (2007) 162 FCR 189; 66 ATR 460; [2007] FCA 1063; BC200705649 ; Alma Hill Constructions Pty Ltd v Onal (2007) 16 VR 190; [2007] VSC 86; BC200702132 .12 Tailby v Official Receiver [188090] All ER Rep 486 at 497; (1888) 13 App Cas 523 at 546 ; Shepherd v Cmr of Taxation (Cth) (1965) 113 CLR 385; [1966] ALR 969; (1965) 39 ALJR 351; BC6500390 . See also JT Nominees Pty Ltd v Macks (2007) 97 SASR 471; 248 LSJS 306; [2007] SASC 151; BC200703365 The paragraph below is current to 20 May 2008 [185-435] Choses in action assignable subject to equities One aspect of the rule that where there is competition in priority between equitable interests and the merits are equal, the first in time prevails, is that the assignee of an equitable interest, even for value, takes subject to all the equities affecting, and infirmities of, his or her assignors title.1 The principle whereby an assignee, whether of a legal or an equitable chose in action, takes subject to the equities means that any defence, set-off or counterclaim available to the debtor as against the creditor is also available as against the assignee.2 This applies to defences which either arise before the debtor is given notice of the assignment or flow out of and are inseparably connected with the obligation, the benefit of which is assigned.3 Notes 1 Redman v Permanent Trustee Co of New South Wales Ltd (1916) 22 CLR 84 at 91; 22 ALR 365 per Griffith CJ and Barton J (beneficiary of exercise of special power of appointment assigned part of the interest; assignee defeated since power was exercised for collateral purposes); Southern British National Trust Ltd (in liq) v Pither (1937) 57 CLR 89 at 105 per Rich J, at 108 per Dixon J; [1937] ALR 393; (1937) 11 ALJ 110 (Y induced X by fraud to assign him Xs right to future dividends; Y assigned to Z; X held to prevail over Z since Zs title could be no better than Ys, and Ys was voidable for fraud).2 Cumming v Austin (1903) 28 VLR 622; 9 ALR

13 ; Southern British National Trust Ltd (in liq) v Pither (1937) 57 CLR 89 at 108-9; [1937] ALR 393; (1937) 11 ALJ 110 per Dixon J; Mitchell v Purnell Motors Pty Ltd [1961] NSWR 165; (1960) 78 WN (NSW) 26; 20 ABC 200 ; Re Harry Simpson & Co Pty Ltd and Companies Act 1936 [1964-65] NSWR 603 at 605; (1963) 81 WN (Pt 1) (NSW) 207 per Jacobs J. Compare Warnock v Austin (1901) 28 VLR 630.3 Tooth v Brisbane City Council (1928) 41 CLR 212 at 223; [1928] ALR 245; (1928) 2 ALJ 179 per Isaacs J. The paragraph below is current to 20 May 2008 [185-440] The second leg of Milroy v Lord Under this rule, if an assignment is intended to be effected by some particular form (for example, direct assignment, declaration of trust, direction to trustee), the court will not give effect to it by treating it as being in another form.1 While it would be incorrect to treat a failed transfer as a declaration of trust, that does not mean that after an effective transfer in equity the legal title holder cannot be said to hold the property as trustee for the assignee pending final transfer of the legal title.2 Notes 1 Milroy v Lord (1862) 4 De GF & J 264 at 274; [1861-73] All ER Rep 783; (1862) 45 ER 1185 at 1189-90 per Turner LJ; Re Rose; Rose v IRC [1952] Ch 499; [1952] 1 All ER 1217 (after the death of a testator the question arose whether certain shares had formed part of his estate at a given date before his death for the purposes of assessing notional death duty. The testator had executed transfers of the shares and handed them, with the appropriate certificates, to the transferees or their agents. They were registered three months later. The crucial date was ten days after the delivery of the transfers and scrip. It was held that on executing the transfers and handing them over with the scrip the testator had done all in his power to divest himself of his right, title and interest in the shares and that the mere fact that the transaction was intended to take effect as a transfer did not mean that it could not operate as a trust for a limited period and for the limited purpose of giving effect to the transfer in the meantime).2 Corin v Patton (1990) 169 CLR 540 at 557-8 per Mason CJ and McHugh J, at 580 per Deane J; 92 ALR 1; 64 ALJR 256 . The paragraph below is current to 20 May 2008 [185-445] Voluntary assignment of legal property not assignable at law The equitable assignment of legal property not assignable at law is governed by the same rules as those governing the assignment of other legal property. It requires no consideration1 and, save as required by statute,2 no formality is needed other than a clear expression of intention to make an immediate disposition.3 Notes 1 For example part of a debt: Shepherd v Cmr of Taxation (Cth) (1965) 113 CLR 385; [1966] ALR 969; (1965) 39 ALJR 351; BC6500390 ; Re Trust of Smyth [1970] ALR 919 at 922 per Fox J (dicta), SC(ACT); Norman v FCT (1963) 109 CLR 9 at 31-2; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J (dicta).2 Norman v FCT (1963) 109 CLR 9 at 30; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J (dicta).3 Norman v FCT (1963) 109 CLR 9 at 30; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J (dicta); Sandford v DV Building & Constructions Co Pty Ltd [1963] VR 137 . The paragraph below is current to 20 May 2008 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations

[185-450] Voluntary assignments of equitable property Equitable property is any right or title enforced at equity but not at common law.1 It can only be assigned in equity if the assignment satisfies the general law test for the validity of assignments appropriate for assignments in particular form, for example, direct assignment and the assignment may still have to be in writing if required by the (IMP) Statute of Frauds 1677.2 The equitable assignment of equitable property requires no consideration3 and, save as provided by statute,4 no formality is needed other than a clear expression of intention to make an immediate disposition.5 No notice need be given to the donee,6 though failure to give notice may be evidence negativing an intent to make an immediate disposition.7 No notice need be given to the trustee or holder of the legal title, though this may be important in binding him or her to respect the assignment and to preserve priorities.8 However, where the transaction is not intended as an immediate transfer but as an agreement to assign in future, consideration is necessary to attract the support of equity to a transaction which is a contract rather than a conveyance.9 Notes 1 Norman v FCT (1963) 109 CLR 9 at 30; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J.2 As to the requirement of writing see [185-460].3 Norman v FCT (1963) 109 CLR 9 at 30; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J.4 (IMP) Statute of Frauds 1677 s 9 (ACT) Imperial Acts (Substituted Provisions) Act 1986 (repealed) Sch 2 Pt 11 cl 1(1)(c) (NT) Statute of Frauds 1677 (IMP) (repealed) s 9 (NSW) Conveyancing Act 1919 s 23C (QLD) Property Law Act 1974 s 11 (SA) Law of Property Act 1936 s 29 (TAS) Conveyancing and Law of Property Act 1884 s 60 (VIC) Property Law Act 1958 s 53 (WA) Property Law Act 1969 s 34. 5 Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614; [1937] VLR 15; [1936] ALR 198 ; Norman v FCT (1963) 109 CLR 9 at 30; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J (dicta). On the distinction between a revocable mandate or authority and assignment see Reid v McIntyre (1905) 11 ALR 159; 26 ALT 229 ; Smith v Perpetual Trustee Co Ltd (1910) 11 CLR 148; 11 SR (NSW) 13; 17 ALR 133 ; Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614; [1937] VLR 15; [1936] ALR 198 ; Field v Battye [1939] SASR 235 ; Cossill v Strangman [1963] NSWR 1695; (1962) 80 WN (NSW) 628 . Where a debtor is directed to pay the assignee, the fund out of which payment is to be made must be identified: see Cossill v Strangman [1963] NSWR 1695; (1962) 80 WN (NSW) 628 . See also Re Docker; Ex parte Official Receiver; English, Scottish & Australian Bank Ltd (Respondent) (1938) 10 ABC 198 ; Perpetual Trustee Co Ltd v Smith (1938) 39 SR (NSW) 19; 56 WN (NSW) 96 .6 Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614 at 622; [1937] VLR 15; [1936] ALR 198 per Dixon J. Similarly, notice need not be given to the assignee where the statutory mode of assigning choses in action is employed: Grey v Australian Motorists & General Insurance Co Pty Ltd [1976] 1 NSWLR 669 at 673, 679 per Glass and Samuels JJA respectively. Compare International Leasing Corp (Vic) Ltd v Aiken [1967] 2 NSWR 427 at 448; (1966) 85 WN (Pt 1) (NSW) 766 per Asprey JA.7 Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614 at 620; [1937] VLR 15; [1936] ALR 198 per Starke J.8 Comptroller of Stamps (Vic) v HowardSmith (1936) 54 CLR 614 at 622; [1937] VLR 15; [1936] ALR 198 per Dixon J. As to priority and notice see [185-325]-[185-360].9 Norman v FCT (1963) 109 CLR 9 at 30-1; [1964] ALR 131;

(1963) 37 ALJR 49

per Windeyer J (dicta).

The paragraph below is current to 20 May 2008 [185-455] Effect of an equitable assignment of equitable property The result of an absolute assignment of equitable property is that the assignor loses all interest in the property and ceases to be a proper plaintiff. The assignee can sue in his or her own name without joining the assignor and may give a good discharge.1 The result of a partial assignment, or an assignment by way of charge, of equitable property is not to deprive the assignor of all interest and the assignor remains a proper and necessary party in proceedings to enforce the assignment.2 Where there is an equitable assignment of legal property, the assignor is a necessary party to proceedings to enforce the assignment, whether or not the assignment is absolute, so that the assignee must sue in the assignors name or have the assignor joined.3 The equitable assignor of the legal chose in action can be compelled to allow the assignee to sue in his name upon the assignor receiving an indemnity as to his costs.4 Notes 1 Redman v Permanent Trustee Co of New South Wales Ltd (1916) 22 CLR 84 at 95; 22 ALR 365 per Isaacs J (dicta).2 Norman v FCT (1963) 109 CLR 9 at 29-30; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J (dicta); Colonial Mutual General Insurance Co Ltd v ANZ Banking Group (New Zealand) Ltd [1995] 3 NZLR 1; [1995] 3 All ER 987; [1995] 1 WLR 1140 .3 Imray v Griffin (1889) 10 LR (NSW) L 114 at 121, 129; 5 WN (NSW) 112 per Stephen and Foster JJ (dicta); Interstate Investment Co Ltd v Mobbs (1928) 28 SR (NSW) 572 ; Norman v FCT (1963) 109 CLR 9 at 27; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J (dicta). The reason for this rule has been said to be partly in order to bind [the assignor] and prevent his suing, partly to allow him to dispute the assignment if he thought fit, and partly because the assignee could not give a valid discharge for the debt to the original debtor unless he had been expressly empowered to do so: Robinson v South Australia [1928] SASR 42 at 47 per Murray CJ (dicta). As to the voluntary assignment of legal property see [185-420].4 Oshlack v Richmond River Council (1998) 193 CLR 72 at [41]; 152 ALR 83; 72 ALJR 578 . See generally Osterreich AG v Five Star General Trading LLC [2001] QB 825 at [60]; [2001] 3 All ER 257; [2001] 2 WLR 1344 ; Thomas v National Australia Bank Ltd [2000] 2 Qd R 448; [1999] QCA 525; BC9908908 . The paragraph below is current to 20 May 2008 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [185-460] Requirement of writing Any equitable disposition of a legal or equitable interest in land must be in writing or be evidenced by writing. The legislative provisions in the States and Territories are similar in form and provide:1 (1) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the interest; (2) a declaration of trust in respect of any land or any interest therein must be manifested and proved by some writing signed by some person declaring the trust or by that persons will; and (3)

a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same or by that persons will. These provisions do not affect the creation or operation of resulting, implied or constructive trusts.2 Of these statutory provisions, list item (1) above does not apply to declarations of trust of land or interests in land which are covered by list item (2) above.3 List item (3) above applies to equitable interests in personalty and realty,4 at least in New South Wales.5 Failure to comply with section 23C(1)(c) of the (NSW) Conveyancing Act 1919 would render a purported assignment of a subsisting equitable interest void. This applies equally to dispositions of equitable interests in real property and personalty.6 If the interest being assigned is an equitable chose in action it would need to have regard to the statutory mechanisms dealing with assignments of choses in action7 although strict compliance with those statutory requirements would not be necessary8 provided the donee is sufficiently equipped with the means of completing the assignment unaided.9 Where a person, beneficially entitled to personalty, creates an equitable estate in a second person, there has been no disposition of an equitable interest for the purposes of list item (3) above but, rather, an equitable interest in the second person has been created.10 A beneficiary who is sui juris and entitled to a beneficial interest corresponding to the full legal interest may impose a new object on his or her trustee by way of direction to hold the trust property on trust for the new object thereafter.11 The direction must be intended to be binding and must be communicated in writing.12 An assignment by way of agreement to assign a subsisting equitable interest for valuable consideration gives rise to a constructive trust of that interest provided that, in the case of a contract which is wholly executory, the contract is specifically enforceable.13 Precisely when the assignment is effected may depend on certain conditions being met or satisfied.14 An assignment of a subsisting equitable interest by way of declaration of trust involves the creation of a sub-trust and the position of the assignor will depend on the type of trust declared.15 If the trust is absolute, the assignor remains beneficiary under the first trust and remains under an obligation to hold those rights for the benefit of the assignee.16 The assignor must indicate an intention to immediately and thenceforth hold the property on trust for the intended beneficiary. Specific words need not be used provided that the intention is clear17 and it is not essential for the declaration to be communicated to the assignee.18 Notes 1 (ACT) Imperial Acts (Substituted Provisions) Act 1986 (repealed) Sch 2 Pt 11 cl 1(1)(c) (NT) Statute of Frauds 1677 (IMP) (repealed) s 4 (NSW) Conveyancing Act 1919 s 23C (QLD) Property Law Act 1974 s 11 (SA) Law of Property Act 1936 s 29 (TAS) Conveyancing and Law of Property Act 1884 s 60(2) (VIC) Property Law Act 1958 s 53 (WA) Property Law Act 1969 s 34. 2 As to constructive trusts see [185-810] and generally see trusts [430-500]-[430-560]. As to implied or resulting trusts generally see trusts.3 Secretary, Department of Social Security v James (1990) 20 ALD 5; 95 ALR 615 , Fed C of A; Abjornson v Urban Newspapers Pty Ltd [1989] WAR 191 at 198-9; (1988) ANZ ConvR 211 per Kennedy J.4 Adamson v Hayes (1973) 130 CLR 276 at 302 per Gibbs J, at 297 per Walsh J; [1972-73] ALR 1224; (1973) 47 ALJR 201 , compare Menzies J at (CLR) 293.5 Hornsby Building Information Centre Pty Ltd v Sydney

Building Information Centre Ltd (1978) 140 CLR 216 at 223-6; 18 ALR 639; 52 ALJR 392; ATPR 40-067 per Stephen J (limited use of headings in statutes and the operation of (NSW) Conveyancing Act 1919 s 23C is not limited to interests in land merely because the heading of the Division is Assurances of Land).6 PT Ltd v Maradona Pty Ltd (No 2) (1992) 27 NSWLR 241 .7 (ACT) Civil Law (Property) Act 2006 s 205 (NSW) Conveyancing Act 1919 s 12 (QLD) Property Law Act 1974 ss 199, 200 (SA) Law of Property Act 1936 s 15 (TAS) Conveyancing and Law of Property Act 1884 s 86 (VIC) Property Law Act 1958 s 134 (WA) Property Law Act 1969 s 20. There are no equivalent provisions in the Northern Territory. 8 William Brandts Sons & Co v Dunlop Rubber Co Ltd [1905] AC 454 at 461; [1904-7] All ER Rep 345 per Lord Macnaghten.9 Corin v Patton (1990) 169 CLR 540 at 557-8 per Mason CJ and McHugh J, at 580-2 per Deane J; 92 ALR 1; 64 ALJR 256 .10 Baloglow v Konstantinidis [2001] NSWCA 451; BC200107960 .11 Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614 at 622; [1937] VLR 15; [1936] ALR 198 per Dixon J.12 Grey v IRC [1958] Ch 375; [1958] 1 All ER 246; [1958] 2 WLR 168 ; Grey v IRC [1958] Ch 690 , CA; Grey v IRC [1960] AC 1; [1959] 3 All ER 603; [1959] 3 WLR 759 . There is also authority that an assignment will be effective where a direction is given to the trustee to transfer the legal title to the trust property to another, without any separate written assignment of the equitable interest: Vandervell v IRC [1967] 2 AC 291; [1967] 1 All ER 1; [1967] 2 WLR 87 . It is not clear whether this would apply in Australia where such an assignment could only operate by way of release of the equitable interest upon completion of the transfer of the legal title into the name of the assignee. The word disposition is defined as including release in the legislation in note 1 above. See also Meagher R P, Heydon J D and Leeming M J, Meagher Gummow & Lehanes Equity: Doctrines and Remedies, 4th ed, Butterworths, Sydney, 2002, [7-075] [7-145].13 Howard v Miller [1915] AC 318; (1914) 112 LT 403 , PC; Central Trust and Safe Deposit Co v Snider [1916] 1 AC 266; (1915) 114 LT 250 , PC; Brown v Heffer (1967) 116 CLR 344; [1968] ALR 89; (1967) 41 ALJR 195 . Where the consideration remains to be executed, different considerations will apply: Oughtred v IRC [1960] AC 206; [1959] 3 All ER 623 , PC. (the approach adopted by Lord Radcliffe who was part of the minority in Oughtred v IRC [1960] AC 206; [1959] 3 All ER 623, PC has been approved in Baloglow v Konstantinidis [2001] NSWCA 451; BC200107960 at [120][125] ; Neville v Wilson [1997] Ch 144; [1996] 3 All ER 171; [1996] 3 WLR 460 . However, no constructive trust will arise until the consideration is paid or provided: Chang v Registrar of Titles (1976) 137 CLR 177 at 184; 8 ALR 285; 50 ALJR 404 per Mason J; Brown v Heffer (1967) 116 CLR 344; [1968] ALR 89; (1967) 41 ALJR 195 ; McMahon v Sydney County Council (1940) 40 SR (NSW) 427; 57 WN (NSW) 142 ; Austin v Sheldon [1974] 2 NSWLR 661; (1974) 31 LGRA 274 ; Haque v Haque (No 2) (1965) 114 CLR 98 at 124-5; [1966] ALR 553; (1965) 39 ALJR 144 per Kitto J; Legione v Hateley (1983) 152 CLR 406; 46 ALR 1; 57 ALJR 292; BC8300063 ; Bahr v Nicolay (No 2) (1988) 164 CLR 604 at 610; 78 ALR 1; 62 ALJR 268 per Wilson, Brennan and Toohey JJ.14 Chief Commissioner of Stamp Duties v ISPT Pty Ltd (1998) 45 NSWLR 639 at 654-5; 9 BPR 16,735; 41 ATR 29 per Meagher JA.15 Re Lashmar; Moody v Penfold [1891] 1 Ch 258; (1890) 64 LT 333 .16 Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614 at 621-2; [1937] VLR 15; [1936] ALR 198 per Dixon J.17 Richards v Delbridge (1874) LR 18 Eq 11.18 Standing v Bowring (1885) 31 Ch D 282; [1881-85] All ER Rep 702 . The paragraph below is current to 20 May 2008

To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [185-465] Donationes Mortis Causa Where a person in apprehension of imminent death or risk of death makes a gift of personal property, conditional upon his or her death (that is, the gift can be retrieved if the donor survives) and delivers the property which is the subject of the gift or its indicia of title or some other symbol of it to the donee prior to death, the gift will be completed by the death of the donor subject to the rule that the property will be available to satisfy the deceaseds creditors if there is a shortfall in the rest of the estate.1 The donor does not need to be in expectation of death. It is enough that the donor is suffering from an illness that may prove fatal and in those circumstances it is implied that the gift is conditional upon the donors death.2 The gift must be made on condition that it is to be absolute and perfected only by the donors death, being recoverable until then.3 This condition may be implied by the surrounding circumstances4 and, sometimes, the condition is not implied.5 Real property is not capable of being the subject of donationes mortis causa as there cannot be a donatio mortis causa of real property by delivery of title deeds.6 Whether or not it is possible to effect a valid donatio mortis causa of common law title land by deposit of title deeds, it appears to be impossible to effect a valid donatio of Torrens title land in view of the requirements for a voluntary assignment of such land.7 Notes 1 Smith v Casen (1718) 1 P Wms 406; 24 ER 447; Public Trustee v Bussell (1993) 30 NSWLR 111; BC9303903 .2 Dufficy v Mollica [1968] 3 NSWR 751 at 755 per Sugerman JA, CA(NSW). The simple inevitability of death will not suffice: Smallacombe v Elders Trustee & Executor Co Ltd [1963] WAR 3 at 4-5 per Hale J.3 Sen v Headley [1991] Ch 425; [1991] 2 All ER 636 at 639; [1991] 2 WLR 1308 per Nourse LJ, CA.4 Northcott v Public Trustee [1955] NZLR 694 .5 Re Bayoff Estate [2000] 3 WWR 455 at 461.6 Watts v Public Trustee (1949) 50 SR (NSW) 130; 66 WN (NSW) 29 ; Bayliss v Public Trustee (1988) 12 NSWLR 540 at 544 per Needham J (necessary requirements for a valid donatio had been met subject to the question of whether real estate, and especially land registered under the (NSW) Real Property Act 1900, could be the subject of a valid donationes mortis causa. After reviewing the authorities, including a reference to the Institutes of Justinian which showed that a donatio of land was recognised in Roman Law, His Honour came to the conclusion that it is impossible to extend the principle of donatio mortis causa to a gift of real property). Compare Sen v Headley [1991] Ch 425; [1991] 2 All ER 636; [1991] 2 WLR 1308 , CA (valid donatio mortis causa of real property).7 Corin v Patton (1990) 169 CLR 540; 92 ALR 1; 64 ALJR 256 . Compare Sen v Headley [1991] Ch 425; [1991] 2 All ER 636; [1991] 2 WLR 1308 , CA but see Public Trustee v Bussell (1993) 30 NSWLR 111; BC9303903 ; Cai Guo Xiang v Mok Hang Won Elsa [2001] HKCFI 277; HCAP000013/1997. The paragraph below is current to 20 May 2008 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [185-470] Rule in Strong v Bird Normally equity will not interfere to perfect an imperfect gift but, under the rule in Strong v Bird,1 a volunteer will sometimes take under a transfer which is initially imperfect. The conditions for the application of the rule are: (1)

during his or her lifetime a testator made a purported immediate gift of specific property to another person or, in the case of a debt, purported to give a voluntary release of the debt. This is subject to a proviso that the property or debt be specific and it has sometimes been held not to be satisfied;2 (2) despite the testators intention that the gift take effect by way of present gift, it failed to do so for want of compliance with the legal requisites for a complete divesting of the title from the intending donor in favour of the intended donee. The intending donor must display a present intention to give3 which must be more than a mere expression of intention; 4 (3) the testator maintained until the date of his or her death the intention that the property should be treated as having been effectually assigned to the intended donee. This condition can be negatived by conduct of the donor inconsistent with the continued operation of the attempt to give5 but a clear intention to release a debt may exist notwithstanding that small parts of it are released in the deceaseds lifetime from time to time;6 and (4) the testator left a will appointing the intended donee as the executor or one of the executors of the testator. The imperfect gift has been assumed to be complete only when the will comes into effect.7 Where these conditions are satisfied the purported donee takes the property free from the dispositions of the will as the testator intended. The donee thus holds the subject matter of the gift as against the beneficiaries under the will for his or her own benefit.8 The rule in Strong v Bird has been applied in cases involving a variety of property for example, bonds and other securities9 and the gift of a debt.10 There is no need to prove the donees assent to the gift.11 The rule applies to land where it passes to the executor by statute.12 In England, the rule in Strong v Bird applies where the donee is one of several executors.13 The rule may also apply where the gift is made jointly, but only one of the parties is the executor.14 Property passing under the rule in Strong v Bird will be caught by standard testators family maintenance and family provision legislation.15 The burden of proving the matters of fact necessary to support a claim by an executor based on the rule in Strong v Bird rests on the executor.16 Since the executor is a claimant against a deceased estate, his or her claim must be strictly scrutinised.17 Although the rule in Strong v Bird remains a clearly established exception to the rule that equity will not assist a volunteer,18 the rule is probably better understood as equity following the common law in its application to the release of debts.19 The New South Wales Supreme Court has expressed the opinion that the rule in Strong v Bird should not in this 21st century be extended at all.20 Notes 1 Strong v Bird (1874) LR 18 Eq 315; [1874-80] All ER Rep 230.2 Bai v Wilson (1915) 34 NZLR 619 ; Re Weaver (decd) [1916] SASR 167 at 176 per Murray CJ.3 Matthews v Matthews (1913) 17 CLR 8; [1913] VLR 466; (1913) 19 ALR 487 , Full Court (a father wanted to give a son land, but only if the son assumed the burdens of ownership of it, which the son was unwilling to do).4 Matthews v Matthews (1913) 17 CLR 8 at 17; [1913] VLR 466; (1913) 19 ALR 487 per Barton ACJ, Full Court.5 Matthews v Matthews (1913) 17 CLR 8 at 19; [1913] VLR 466; (1913) 19 ALR 487 per Barton ACJ, Full Court.6 Re Ariell (No 2) [1974] Qd R 293 .7 Re Weaver (decd) [1916] SASR 167 at 176 per Murray CJ; Re Hince [1946] SASR 323 at 331 per Abbott J. See also Bone v Cmr of Stamp Duties (NSW) (1974) 132 CLR 38 at 47; 3 ALR 561; 48 ALJR

310 per Stephen J. Compare Re Applebee; Leveson v Beales [1891] 3 Ch 422; (1891) 65 LT 406 .8 Cope v Keene (1968) 118 CLR 1 at 8 sub nom Re Keene (decd); Cope v Keene [1969] ALR 57; (1968) 42 ALJR 169 per Kitto J (first three conditions were not satisfied).9 Re Hince [1946] SASR 323 .10 Re Ariell (No 2) [1974] Qd R 293 .11 Matthews v Matthews (1913) 17 CLR 8 at 20-1; [1913] VLR 466; (1913) 19 ALR 487 per Barton ACJ, Full Court (an express refusal of the gift as proffered puts an end to the matter, unless, indeed, there is a subsequent proffer not followed by any repudiation).12 Re Mulholland; Killen v Bratt (1916) 33 WN (NSW) 89 . Question left open in Matthews v Matthews (1913) 17 CLR 8; [1913] VLR 466; (1913) 19 ALR 487 , Full Court; Cope v Keene (1968) 118 CLR 1 at 8 sub nom Re Keene (decd); Cope v Keene [1969] ALR 57; (1968) 42 ALJR 169 per Kitto J (with whom McTiernan J agreed).13 Re Stewart; Stewart v McLaughlin [1908] 2 Ch 251; [1908-10] All ER Rep 133 . Compare Matthews v Matthews (1913) 17 CLR 8 at 45; [1913] VLR 466; (1913) 19 ALR 487 per Gavan Duffy and Rich JJ, Full Court (question left open).14 Blackett v Darcy (2005) NSWLR 392; 12 BPR 22,779; [2005] NSWSC 65; BC200500367 .15 Re Keene (1967) 86 WN (Pt 1) (NSW) 317 at 319 per Hardie J; Cope v Keene (1968) 118 CLR 1 at 9 sub nom Re Keene (decd); Cope v Keene [1969] ALR 57; (1968) 42 ALJR 169 per Kitto J (considering the (NSW) Testators Family Maintenance and Guardianship of Infants Act 1916).16 Matthews v Matthews (1913) 17 CLR 8 at 28-9; [1913] VLR 466; (1913) 19 ALR 487 per Barton ACJ, Full Court.17 Matthews v Matthews (1913) 17 CLR 8; [1913] VLR 466; (1913) 19 ALR 487 , Full Court.18 Corin v Patton (1990) 169 CLR 540 at 557; 92 ALR 1; 64 ALJR 256 per Mason CJ and McHugh J.19 Hill v Van Erp (1997) 188 CLR 159 at 228 per Gummow J; 142 ALR 687; 71 ALJR 487 : the rule has been referred to as the so-called rule in Strong v Bird by a member of the High Court: other recent decisions point to the limitations on the application of the rule in Strong v Bird: Cinema Plus Ltd v Australia and New Zealand Banking Group Ltd (2000) 49 NSWLR 513 at [29]; 35 ACSR 1; 157 FLR 204 per Spigelman CJ.20 Blackett v Darcy (2005) NSWLR 392; 12 BPR 22,779; [2005] NSWSC 65; BC200500367 at [37] . The paragraph below is current to 20 May 2008 [185-475] Assignment of legal property for valuable consideration Where one party agrees to assign legal property to another in return for valuable consideration, the vendor will be a constructive trustee of the property. This rule will apply notwithstanding failure to comply with any statutory requirement that the agreement concerned be in writing or some other particular form.1 Where equity recognises an assignment for value of legal property, the consideration must be paid or executed.2 This is an illustration of the maxim that equity regards as done that which ought to have been done. Notes 1 Last v Rosenfeld [1972] 2 NSWLR 923 . As to constructive trusts see [185-810] and generally see trusts [430-565]-[430-675].2 Holroyd v Marshall (1862) 10 HL Cas 191; [1861-73] All ER Rep 414; (1862) 11 ER 999 ; Tailby v Official Receiver (1888) 13 App Cas 523; [1886-90] All ER Rep 486 ; Re Androma Pty Ltd [1987] 2 Qd R 134 . The paragraph below is current to 20 May 2008 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [185-480] Assignments of future property Equity will recognise an assignment of future property if it is made for value. Such an assignment operates as an agreement to assign the property when acquired.1 The beneficial interest passes to the assignee as soon as the assignor acquires legal ownership provided that the property has been sufficiently described to be identifiable.2 The assignees interest in the after acquired or future property is sufficient to survive

the assignors bankruptcy.3 Consideration is essential in order to bind the conscience of the assignor.4 Examples of future property include: (1) interest payable on a debt repayable at any time without notice;5 (2) dividends as yet undeclared on company shares or on shares not yet owned by the assignor;6 (3) the first $1000 of the net income of a trust deriving its income from farming operations, it being uncertain whether $1000 would in fact be produced;7 and (4) an expectancy under the will of a living person.8 This principle is of considerable importance in the law of corporate finance as a floating charge can be created to cover future property such that, as soon as the debtor acquires property within the meaning of the after acquired property clause, the security interest attaches to that asset from the date of the agreement (unless the agreement evinces a contrary intention).9 Examples of property which may seem future but are in truth present are: (1) contingent interests under the will of a deceased testator;10 (2) a legal right to be paid money at a future date under an existing contract on the repudiation of which an action could be brought for anticipatory breach;11 (3) the right to receive sums payable in the future under an existing hire-purchase agreement or building contract;12 (4) the whole or a fraction of a life interest under a trust;13 and (5) 90 per cent of the rights to royalties arising in the next three years under a patent licence as opposed to 90 per cent of such royalties as were actually received in that time.14 Notes 1 Norman v FCT (1963) 109 CLR 9 at 24; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J; Federal Cmr of Taxation v Everett (1978) 21 ALR 625 at 643-4; 38 FLR 26; 9 ATR 211; 78 ATC 4595 per Deane J, Fed C of A.2 Palette Shoes Pty Ltd (in liq) v Krohn (1937) 58 CLR 1 at 267; [1937] ALR 432 per Dixon J (dicta); Akron Tyre Co Pty Ltd v Kittson (1951) 82 CLR 477 at 485; [1951] ALR 277; (1951) 24 ALJ 548 per Latham CJ (dicta); Norman v FCT (1963) 109

CLR 9 at 24-5; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J (dicta). It is not necessary that the contract be enforceable by a decree of specific performance: Redman v Permanent Trustee Co of New South Wales Ltd (1916) 22 CLR 84 at 96; 22 ALR 365 per Isaacs J (dicta); Perpetual Trustee Co Ltd v Smith (1938) 39 SR (NSW) 19 at 40; 56 WN (NSW) 96 per Jordan CJ. Nothing further need be done by the assignor and he or she has no title at the time the property comes into existence: Re Row Dal Constructions Pty Ltd (in liq) [1966] VR 249 at 254 per Herring CJ. Compare Akron Tyre Co Pty Ltd v Kittson (1951) 82 CLR 477 at 493; [1951] ALR 277; (1951) 24 ALJ 548 per Williams and Kitto JJ (dicta). These rules are excluded by the (UK) Sale of Goods Act 1893 and its Australian equivalents: King v Greig [1931] VLR 413; [1931] ALR 309 (approved in Akron Tyre Co Pty Ltd v Kittson (1951) 82 CLR 477; [1951] ALR 277; (1951) 24 ALJ 548 ). The Australian equivalents to the (UK) Sale of Goods Act 1893 are: (NSW) Sale of Goods Act 1923 s 54 (QLD) Sale of Goods Act 1896 s 54 (SA) Sale of Goods Act 1895 s 52 (TAS) Sale of Goods Act 1896 s 57 (VIC) Goods Act 1958 s 59 (WA) Sale of Goods Act 1895 s 52. 3 Palette Shoes Pty Ltd (in liq) v Krohn (1937) 58 CLR 1 at 27; [1937] ALR 432 per Dixon J (dicta); Re Puntoriero; Ex parte Nickpack Pty Ltd (1991) 104 ALR 523 , Fed C of A; Re Lind; Industrials Finance Syndicate Ltd v Lind [1915] 2 Ch 345; [1914-15] All ER Rep 527 . See also Deputy Cmr of Taxation v GIO(NSW) (1993) 45 FCR 284; 117 ALR 61; 26 ATR 544; 93 ATC 4901 .4 Palette Shoes Pty Ltd (in liq) v Krohn (1937) 58 CLR 1 at 27; [1937] ALR 432 per Dixon J (dicta). See also Liverpool & London and Globe Insurance Co Ltd v Hartley [1927] VLR 523 at 529; [1927] ALR 417 per Cussen J; Norman v FCT (1963) 109 CLR 9; [1964] ALR 131; (1963) 37 ALJR 49 .5 Palette Shoes Pty Ltd (in liq) v Krohn (1937) 58 CLR 1; [1937] ALR 432 .6 Norman v FCT (1963) 109 CLR 9; [1964] ALR 131; (1963) 37 ALJR 49 .7 Williams v IRC [1965] NZLR 395 . See also Golding v Hands [1969] WAR 121 at 127 per Jackson J.8 Redman v Permanent Trustee Co of New South Wales Ltd (1916) 22 CLR 84; 22 ALR 365 .9 Tailby v Official Receiver (1888) 13 App Cas 523; [1886-90] All ER Rep 486 .10 Peter v Shipway (1908) 7 CLR 232; 15 ALR 214 .11 Norman v FCT (1963) 109 CLR 9 at 26; [1964] ALR 131; (1963) 37 ALJR 49 per Windeyer J (dicta); McLeay v IRC [1963] NZLR 711 ; Re Trust of Smyth [1970] ALR 919 at 922 per Fox J, SC(ACT).12 G & T Earle Ltd v Hemsworth RDC (1928) 140 LT 69; 44 TLR 758; [1928] All ER Rep 602 ; Norman v FCT (1963) 109 CLR 9; [1964] ALR 131; (1963) 37 ALJR 49 ; Hughes v Pump House Hotel Co Ltd [1902] 2 KB 190 .13 Williams v IRC [1965] NZLR 395 at 399 per North P and Turner J, at 402 per McCarthy J (dicta).14 Shepherd v Cmr of Taxation (Cth) (1965) 113 CLR 385; [1966] ALR 969; (1965) 39 ALJR 351; BC6500390 . The paragraph below is current to 20 May 2008 [185-485] Property which cannot be assigned There are certain types of property, generally the benefit of particular contracts, which cannot be assigned in law or equity. These include the right to receive payment by a holder of public office and other contracts where the benefits provided are peculiar to the party entitled to or providing them, such as contracts for personal services.1 An assignment by a public servant of the whole or part of his or her salary is void as being against public policy if the effect of the assignment is that it reduces him or her to such a state of poverty that he or she is not in a fit state of preparation to perform the duties of his or her office.2 Similarly, a contract for insurance of a motor vehicle cannot be assigned as it is

dependent on the insurance record of the insured.3 It may be a term of the particular contract that benefits provided by it may not be assigned and such a term may be express or implied.4 An assignment is void if the effect of a valid assignment would make a substantial difference to the substance of the obligation the benefit of which is assigned.5 An assignment savouring of maintenance where the support of the action is by a person who has no interest in it is void. Thus a right to sue in tort is a bare right of action and is unassignable6 as is a bare right to set aside a deed on equitable grounds.7 But an assignment of a right to sue which is incidental to property or incidental and subsidiary to a principal transaction is valid.8 A stipulation that a debt is not to be assigned does not affect the validity of any assignment as between assignor and assignee. The debtor or fundholder may, however, be entitled to refuse payment to the assignee.9 This does not affect the question of the remedies which may be available to the debtor against the creditor for breach of the stipulation. The benefit of a contract involving personal skill or the reposing of confidence in a particular person, such as the benefit of an authors contract with a publisher, cannot be assigned.10 A question arises as to how to characterise the subject matter of the contract that has been or is purported to have been assigned.11 Moreover, the fruits of the performance of the contract involving personal skill may be assigned.12 A contractual obligation of confidence has also been held to be assignable.13 Notes 1 Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014; [1940] 3 All ER 549 .2 Field v Battye [1939] SASR 235 .3 Peters v General Accident and Life Assurance Corp Ltd [1937] 4 All ER 628, KB.4 Robson and Sharpe v Drummond (1831) 2 B & Ad 303; [1824-34] All ER Rep 158; (1831) 109 ER 1156; British Waggon Co v Lea & Co (1880) 5 QBD 149; [1874-80] All ER Rep 1135 ; Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd [1903] AC 414 at 417; [1900-3] All ER Rep 386 per Lord Macnaghten.5 This may be because the particular personality of the assignor is important: Bruce v Tyley (1916) 21 CLR 277 at 284-5, 289-91; 22 ALR 215 per Barton and Isaacs JJ (cleaner of military installations in wartime); Moore v Collins [1937] SASR 195 (share farming agreement).6 New Zealand Loan and Mercantile Agency Co Ltd v Mitchell (1906) 26 NZLR 433 ; Poulton v Commonwealth (1953) 89 CLR 540 at 602; [1954] ALR 1; (1953) 27 ALJ 707 per Williams, Webb and Kitto JJ.7 McGregor v Fraser (1913) 32 NZLR 1325 .8 Re Kenneth Wright Distributors Pty Ltd (in liq); W J Vine Pty Ltd v Hall [1973] VR 161 at 166-8 per Kaye J (assignment of cars together with right to sue bailee for damage caused to them).9 Anning v Anning (1907) 4 CLR 1049 at 1067; 13 ALR 709; 11 ALJ 108 per Isaacs J (dicta). See also Helstan Securities Ltd v Hertfordshire County Council [1978] 3 All ER 262; (1978) 76 LGR 735 .10 Griffith v Tower Publishing Co Ltd [1897] 1 Ch 21 at 23-4 .11 Bruce v Tyley (1916) 21 CLR 277 at 291; 22 ALR 215 per Isaacs J.12 Linden Gardens Trust Pty Ltd v Lenesta Sludge Disposals Ltd [1994] 1 AC 85; [1993] 3 All ER 417; [1993] 3 WLR 408 ; Don King Productions v Warren [2000] Ch 293; [1999] 2 All ER 218; [1999] 3 WLR 276 .13 Mid-City Skin Cancer & Laser Centre Pty Ltd v Zahedi-Anarak (2006) 67 NSWLR 569; [2006] NSWSC 844; BC200607190 . The court distinguished between the assignment of the right to confidentiality and the assignment as a transfer of property, stating that confidential information is not an asset capable of being assigned. While the decision was based on an implied contractual obligation, the courts commented that there was no reason that the same considerations should not apply to transfer of the equitable chose in action.

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Bottom of Form (D) Satisfaction and Ademption The paragraph below is current to 20 May 2008 [185-1145] Satisfaction Satisfaction is the gift of a thing with the intention that it be taken either wholly or partly in extinguishment of some prior claim of the donee.1 Satisfaction may occur when:2 (1) a covenant to settle property is followed by a gift by will or settlement in favour of the person entitled beneficially under the covenant; (2) a testamentary disposition is followed during the testators lifetime by a gift or settlement in favour of the devisee or legatee; and (3) a legacy is given to a creditor. Though satisfaction is used to describe all three sets of circumstances, ademption is also used to describe the second.3 Equity will consider an obligation to have been fulfilled in a number of different circumstances. Satisfaction occurs where the obligor makes a gift or confers a benefit on the party to whom the obligation is owed with the intention, actual or presumed, that the gift or benefit should satisfy the obligation.4 A legacy at least equal in value and at least as beneficial as the debt will mean equity presumes an intention on the part of the creditor that the legacy was meant as satisfaction.5 However, this presumption is easily rebutted.6 If the amount of the legacy is less than the amount owed there is no satisfaction.7 On the other hand, if the legacy is larger than the amount owed, the

presumption of satisfaction may arise.8 Equity will not presume satisfaction if the legacy is substantially different from what is owed.9 Notes 1 Lord Chichester v Coventry (1867) LR 2 HL 71 at 95 per Lord Romilly.2 Satisfaction only operates in respect of a prior claim of the donee, if he or she has no claim the doctrine cannot apply: Re Hampton [1922] SASR 286 at 291-2 per Gordon J.3 See Lord Chichester v Coventry (1867) LR 2 HL 71 at 90 per Lord Romilly; Re Moores Rents [1917] 1 IR 244. See also Trimmer v Bayne (1802) 7 Ves 508 at 515; 32 ER 205 . Another sense of ademption arises where a testator makes a disposition by will and then, in his or her lifetime, makes a disposition of the property quite inconsistent with the testamentary disposition. The effect of the doctrine is that the testamentary gift is treated as revoked: Read v Van Brakkel (1914) 14 SR (NSW) 124 ; Abernethy v Simpson [2007] NSWSC 186; BC200701291 ..4 Weall v Rice (1831) 2 Russ & M 251; 39 ER 390; Hopwood v Hopwood (1859) 7 HL Cas 728 at 737.5 Atkinson v Webb (1704) 2 Vern 478; 23 ER 907 ; Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798; [1938] ALR 530; (1938) 12 ALJ 317 .6 Hassell v Hawkins (1859) 4 Drew 468; 62 ER 180 .7 Lambert v Waters [1954] St R Qd 212 at 223; (1953) 28 ALJ 383n per Macrossan CJ, Fed C of A.8 Re Rattenberry; Ray v Grant [1906] 1 Ch 667; (1906) 75 LJ Ch 304 .9 Eastwood v Vinke (1731) 2 P Wms 613; 24 ER 883. The paragraph below is current to 20 May 2008 [185-1150] Presumption of satisfaction of a portion by a legacy Where a father or someone in loco parentis makes a gift of a legacy to a child, which is intended to be a portion for the benefit of the child generally, and that parent, during his or her lifetime, subsequently makes a gift in favour of the child in the nature of a portion which is substantially of the same nature as that given by the will, the inter vivos gift will be presumed to have been given in substitution for, or in satisfaction of, the legacy.1 However, a presumption of ademption also arises where a testator, not being a father or a person in loco parentis to a legatee, gives him or her a legacy for a particular purpose and afterwards advances money for a similar purpose.2 The first presumption is grounded on the courts disposition against double portions, is purported to be based on promoting equality among children and to be consistent with the favour presently shown by the law to sharing within the family and with the attempts of parliament through testators family maintenance and family provision legislation to limit the caprice of testators.3 It is also based on the view that a testator has a moral obligation to provide for his or her children and, if the testator leaves a legacy and then provides a portion, he or she is seen to be performing this obligation in anticipation and intending to prepay the legacy.4 The second presumption is based on the likely intention of the testator.5 An example of the second presumption of ademption of a legacy by a gift arises where both dispositions are intended to satisfy the same moral obligation, such as providing for a widow.6 Where the circumstances are not such as to raise a presumption of ademption of a legacy by a gift, the intention that the gift should be taken in satisfaction of the legacy must be brought to the knowledge of the donee at the time of the gift so that, in effect, the gift is made on the condition that the legacy should not be claimed.7 The rule applies not only to a legacy but also to a bequest of a share in residue.8 In the case of a substitutional gift, where the substituted donee is directed to take the share which the original donee would have taken if he or she had survived the testator, the doctrine is applied against the substituted donee to the same extent as it would be applied against the original donee.9 Both gifts must be in nature of portion. When the donor is the father of or a person in loco parentis

to the donee, the presumption of satisfaction or ademption only arises where the two gifts are in the nature of portions. A portion is a provision for the advancement of the child in life.10 It is the making of a more or less permanent, as opposed to a casual, provision for a child or a gift for the purpose of establishing a child in life and a portion is to be contrasted with an unqualified gift in the nature of a cash bounty for personal use or a mere contribution towards maintenance.11 Ademption can also operate in circumstances where a testator, having made the relevant legacy, loses testamentary capacity and the person managing the testators affairs makes an inter vivos gift adeeming the legacy.12 However, where the testator is incapable of selling the property or of altering an existing will to give effect to their intentions, the sale of property under a power of attorney may not adeem the devise of the property under a will.13 Notes 1 Re Lacon; Lacon v Lacon [1891] 2 Ch 482 at 498 , CA. See also Abernethy v Simpson [2007] NSWSC 186; BC200701291 .2 Re Sparrow (decd) [1967] VR 739 at 741 per Little J. See Re Everett (1917) SALR 52 at 65 per Murray J. See also Seaborn v Marsden (1926) 26 SR (NSW) 485 at 495-6; 43 WN (NSW) 125 per Long Innes J (the doctrine rested on at least two and possibly three presumptions).3 Lake v Quinton [1973] 1 NSWLR 111 at 139-40 per Hutley JA, at 121 per Jacobs P, CA(NSW) (reference to the presumption as being that a father does not intend double portions for his children so that one obtains a preference over another or others).4 Seaborn v Marsden (1926) 26 SR (NSW) 485 at 495; 43 WN (NSW) 125 per Long Innes J (citing Re Furness; Furness v Stalkartt [1901] 2 Ch 346 at 349-50; (1901) 84 LT 680 per Joyce J).5 Weall v Rice (1831) 2 Russ & M 251; 39 ER 390; Hopwood v Hopwood (1859) 7 HL Cas 728 at 737.6 Salway v Snowden (1888) 14 VLR 669 (bequest of annuity to widow to acquire residence for herself adeemed by gift of matrimonial home). The purposes of the legacy were not satisfied by the gift where the purpose of the legacy was to erect a church, with all necessary fittings and accessories, and a manse, and the purpose of the gift was to build a church and organ, the church was left incomplete and the gift did not even extend to the manse: Re Leggatt; Griffith v Calder [1908] VLR 385; (1908) 14 ALR 314 .7 Re Everett (1917) SALR 52 at 65-6 per Murray CJ.8 Seaborn v Marsden (1926) 26 SR (NSW) 485 at 495; 43 WN (NSW) 125 per Long Innes J.9 Re Wells; Wells v Begley (1930) 30 SR (NSW) 150; 47 WN (NSW) 26 .10 Lake v Quinton [1973] 1 NSWLR 111 at 122 per Jacobs P, CA(NSW); Taylor v Taylor (1875) LR 20 Eq 155 at 159; 44 LJ Ch 946 per Jessel MR. An example of ademption of a legacy by a portion arose where the testator made residuary gifts to his children in his will, and later declared himself trustee of the moneys in certain savings accounts for five of his daughters, it was held that the residuary gifts to those five children had been adeemed: Re Mills (decd) [1952] SASR 274 . Whether the definition of portion is met will normally be a matter of ascertaining the donor or testators intention, an inquiry which will involve, amongst other things, inquiry into the language of the will and all of the circumstances surrounding the gift: Re Cameron [1999] Ch 386 at 404; [1999] 2 All ER 924; [1999] 3 WLR 394 . See also Meagher R P, Heydon J D and Leeming M J, Meagher Gummow & Lehanes Equity: Doctrines and Remedies, 4th ed, Butterworths, Sydney, 2002, [31-075].11 Re Mills (decd) [1952] SASR 274 at 277-8 per Ligertwood J (gifts in trust for daughters were held to be portions, for even when they came of age the daughters could not access and spend the money by terminating the trusts without recourse to the courts; and they were kept in ignorance of the gifts).12 Re Cameron [1999] Ch 386; [1999] 2 All ER 924; [1999] 3 WLR 394 .13 In the Matter of the affairs of Hartigan; Ex parte the Public Trustee (unreported, WASC, Parker J, 2283 of 1997, 9 December 1997, BC9707385) (followed Mulhall v Kelly [2006] VSC 407; BC200608993 ). See, however, Orr v Slender (2005) 64 NSWLR 671; [2005] NSWSC 1175; BC200510063 (where it was held that the authorised sale under a power of attorney would give rise to an ademption). The paragraph below is current to 20 May 2008 [185-1155] Satisfaction pro tanto The second provision need not be equal in value or greater than the first provision to attract the presumption of ademption.1 In determining whether a

provision has been satisfied in whole or, if it is satisfied pro tanto, to what extent it is satisfied, the appropriate date for the interest of the beneficiary under the provisions to be valued is the date the subject matter of the gift is taken into beneficial enjoyment in possession.2 In ordinary inter vivos gifts or settlements, the date of the gift or settlement is the appropriate date because beneficial enjoyment is not postponed and commences then.3 However, where a portion follows the gift of a life interest in the testator, the appropriate date is the date of the testators death.4 Notes 1 Re Sparrow (decd) [1967] VR 739 at 741 per Little J; Re Pollack; Pollock v Worrall (1885) 28 Ch D 552 at 556; 54 LJ Ch 489; 52 LT 718 per Earl of Selborne LC.2 Lake v Quinton [1973] 1 NSWLR 111 at 123 per Jacobs P, at 134-5 per Street CJ, CA(NSW) (compare Hutley JA at 144).3 Watson v Watson (1864) 33 Beav 574; 55 ER 491 .4 Lake v Quinton [1973] 1 NSWLR 111 at 124 per Jacobs P, at 134-5 per Street CJ, CA(NSW). The paragraph below is current to 20 May 2008 [185-1160] In case of satisfaction of an obligation, donee may elect In a case of ademption, the beneficiary has no choice whether he or she will take the earlier or the later provision. The earlier provision depends solely on the testators bounty and ademption operates by way of revocation of the bounty, in whole or in part. But where a settlor has undertaken an obligation, he or she has no right to terminate that obligation by substituting a different provision by his or her will or by a later settlement.1 Notes 1 Hence, where the different provision would operate as satisfaction, so that the beneficiary cannot take both provisions, he or she is entitled to elect between the two: Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 815; [1938] ALR 530; (1938) 12 ALJ 317 per Dixon CJ (a husband covenanted to pay his wife an annuity of 650 by equal quarterly instalments while she remained chaste. By his will, he directed that income from his residuary estate, up to but not exceeding 650 per annum be paid to his wife by equal quarterly instalments for her life or until she remarried. It was held that the legacy was in satisfaction of the annuity and the wife was put to her election as to which she would take. The court must be satisfied that the testator intended the gift in the will to be a substitute for the gift inter vivos). This could not apply in a case of ademption, that is, where the covenant was entered into after the making of the will, as there is no possibility that the testator intended the gift in the will to operate in substitution for the inter vivos covenant. The paragraph below is current to 20 May 2008 [185-1165] Presumption against double portions The presumption against double portions is rebuttable. In deciding whether the presumption against double portions has been rebutted, it is necessary to consider all the circumstances of each case, in particular the time,1 manner,2 nature, amount and object of the gift,3 as well as any express declaration by the testator that the second gift was intended to be cumulative.4 Portions may be double where one is to the first child and the second portion is partly for the benefit of the same child.5 Thus, if a grandparent pays the grandchilds education expenses, this can be seen by equity as a payment to the child thus adeeming an earlier legacy to that child.6 The presumption may also be rebutted by evidence of the testators intention from the language of the document effecting the second gift. The presumption, in effect, puts the burden of disproving it on the person claiming both portions.7 Slight differences do not rebut the presumption.8 The presumption may also be rebutted by the language of a document made earlier in time than the second. The intention at the time of a will is as important as the intention at the time of a gift inter vivos.9 The presumption will be rebutted where:

(1) a will expressly disclaims the idea that the testator had at that time made a fixed and irrevocable plan on which his or her estate should be distributed, and states that the testator contemplated making further advances to his or her children which might effect a more fair distribution and that such advances are not to be taken in satisfaction of the benefits conferred by the will unless they are evidenced by entries in the books of account;10 and (2) the gift made after the will is merely a continuation of a gift promised and partly made before the will.11 The doctrine of ademption may still apply where the later advance of money is merely part of a bargain for which the recipient gives consideration, for the doctrine depends entirely on intention.12 A settlement made pursuant to an order of the court, whether by consent or otherwise, would not necessarily rebut any presumption of ademption. If his or her actual intention was to effect double portions, the presumption is rebutted, but not otherwise.13 A codicil republishing a will does not make the will speak as from its own date for the purpose of reviving a legacy which has been adeemed.14 Differences between the limitations in the two provisions will only exclude the rule against double portions where they are so great as to indicate that the donor did not intend the later to be in satisfaction of the earlier.15 Notes 1 Re Simpson; Millar v Simpson (1906) 7 SR (NSW) 78 at 82; 24 WN (NSW) 4 per Street J (significance was attached to the fact that a gift of substantial amount (1000) was made on the marriage of the donors daughter, which is a time when one would expect that the parent would be making provision for the child).2 Re Simpson; Millar v Simpson (1906) 7 SR (NSW) 78; 24 WN (NSW) 4 (the gift of 1000 as pocket money was held capable of bearing the meaning that it should be invested to provide an annual sum by way of pocket money, thus adeeming a legacy).3 Re Simpson; Millar v Simpson (1906) 7 SR (NSW) 78 at 82; 24 WN (NSW) 4 per Street J.4 Re Mills (decd) [1952] SASR 274 at 277-8 per Ligertwood J (gifts of 500 to each of five daughters were held not to be too small because they represented a substantial part of the testators fortune. The legacies were residuary gifts contingent on the daughters attaining 21, while the interests under the trusts were vested absolutely; this difference was held insignificant, for as each daughter turned 21 the trusts became the same, and there was no rule against an absolute interest adeeming a contingent interest. The family circumstances did not indicate an intention in favour of double portions). See also Parker v Dowling (1916) 16 SR (NSW) 234; 33 WN (NSW) 75 .5 Re Cameron [1999] Ch 386 at 412-413; [1999] 2 All ER 924; [1999] 3 WLR 394 .6 Re Cameron [1999] Ch 386; [1999] 2 All ER 924; [1999] 3 WLR 394 .7 Lake v Quinton [1973] 1 NSWLR 111 at 123 per Jacobs P, CA(NSW).8 Though slight circumstances will rebut the presumption in cases of satisfaction of debts by legacies, they will not suffice to rebut the presumptions against double portions; a substantial or material difference is both necessary and sufficient, unless the testator has made his or her intentions clear, in which case they will be given effect: Lake v Quinton [1973] 1 NSWLR 111 at 123 per Jacobs P, CA(NSW).9 Seaborn v Marsden (1926) 26 SR (NSW) 485 at 497; 43 WN (NSW) 125 per Long Innes J (if a testator in his will declared that it was his intention to subsequently make a settlement upon his daughter, on her then intended and approaching marriage and that for that reason he had by his will given her a less share than she would otherwise have taken under the will, the property subsequently settled by him upon that daughter on her marriage would not effect an ademption of the share taken by her under the will, notwithstanding the absence of any further evidence as to the settlors intention at the date of such settlement).10 Seaborn v Marsden (1926) 26 SR (NSW) 485 at 498; 43 WN (NSW) 125 per Long Innes J (no evidence in books of account).11 Parker v Dowling (1916) 16 SR (NSW) 234; 33 WN (NSW) 75 .12 Re Sparrow (decd) [1967] VR 739 at 744-5 per Little J

(applying Re Horrocks (decd) [1944] NZLR 314 ) (testator bequeathed to his wife an interest for life or until her remarriage in half the net income of his residuary estate, and later made with her a separation agreement by which she was to be paid a weekly amount for life, the later agreement was held to adeem the bequest because an intention that it should do so that it be the wifes sole source of maintenance and support out of his estate could be collected from it).13 Lake v Quinton [1973] 1 NSWLR 111 at 121 per Jacobs P, CA(NSW); Seaborn v Marsden (1926) 26 SR (NSW) 485 at 499; 43 WN (NSW) 125 per Long Innes J.14 Seaborn v Marsden (1926) 26 SR (NSW) 485; 43 WN (NSW) 125 (the codicil can only act upon the will as it existed at the time; and at the time the adeemed legacy formed no part of it. As regards that legacy the codicil can have no effect unless it in effect gives the legacy anew, and a mere republication of the will does not have this effect. But a codicil, though it may not constitute a re-gift of an adeemed legacy, may have strong evidentiary value on the question whether a legacy previously given by the will has or has not been adeemed by a gift subsequent to the will).15 A residuary legacy which was vested, though subject to divestment if the beneficiaries failed to attain 25 years (30 in the case of females), has been held not to be adeemed by a contingent gift subject to long postponement: Lake v Quinton [1973] 1 NSWLR 111 at 121 per Jacobs P, CA(NSW). But that legacy was adeemed by a remainder interest contingent upon attaining 21 years taking effect after the testators life interest, and hence at the same time as the legacy, the difference in the ages of absolute vesting was not so significant as to rebut the presumption of ademption: Lake v Quinton [1973] 1 NSWLR 111 at 121-2 per Jacobs P (with whom Street CJ agreed), at 142-4 per Hutley JA, CA(NSW). The paragraph below is current to 20 May 2008 [185-1170] Gifts must be ejusdem generis The fact that there is a difference between the property given by will and the property the subject of the settlement does not prevent ademption.1 A legacy is not adeemed by a portion where one of the gifts is of land and the other of money on the ground that the two gifts must be ejusdem generis and land and money have never been treated as so assimilated.2 This is not the case in New South Wales where the law has sought to assimilate the position of realty and personalty.3 The rule applies to realty4 one gift can be of realty and another of personalty.5 An obligation to pay money may be adeemed by a bequest of shares.6 The requirement that the two provisions must be ejusdem generis has been said to be overstating the position differences of kind are merely evidence of a double portion.7 It seems that there is no rule that the two gifts must be in money or made with reference to money or pecuniary value. They need not be expressly valued when made.8 Notes 1 Lake v Quinton [1973] 1 NSWLR 111 at 123 per Jacobs P, CA(NSW) (residue and public company shares).2 Re Chirnside (1903) 29 VLR 4 at 14; 9 ALR 71 per ABeckett J (a gift of residue was adeemed by a settlement of inscribed stock). As to the ejusdem generis rule generally see deeds and other instruments [140-640].3 Lake v Quinton [1973] 1 NSWLR 111 at 142 per Hutley J, CA(NSW).4 Public Trustee v Regan (1933) 33 SR (NSW) 361 at 368; 50 WN (NSW) 153 per Long Innes J (the statement that a devise of land could not ordinarily be termed a portion, however correct it may be as applying to England, with its system of entail, can scarcely be regarded as accurate in this country where a considerable proportion of the population is engaged in pastoral pursuits, and where lands, originally acquired in very large areas, are subsequently subdivided and re-subdivided by the holders thereof among their children, and very frequently by way of portion: and I should think it not unlikely that the same practice obtains in other parts of the British Dominions).5 Lake v Quinton [1973] 1 NSWLR 111 at 140-2 per Hutley JA, CA(NSW) (not following Re Chirnside (1903) 29 VLR 4 at 14; 9 ALR 71 per ABeckett J) (the Parliament of New South Wales has consistently striven to assimilate the position of realty and personalty. Today for all practical purposes in relation to estates there is no difference between realty and personalty).6 Lake v Quinton [1973] 1 NSWLR 111 , CA(NSW).7 Re Mills (decd) [1952] SASR 274 at 277-8 per Ligertwood J.8 Lake v Quinton [1973] 1 NSWLR 111 at 139, 143-4 per Hutley JA, CA(NSW) (on principle, one would think

that the rule against double portions would have no mechanical operation and, provided the property settled could be valued in the market, the fact that in one case a provision is made in specie and in another case by the provision of funds should make no differenceThe law would surely be strange if the application of the principle against double portions depended upon the question whether in the instrument of settlement itself the reference was made to the value of the shares where, for stamp duty purposes at any rate, the value had to be calculated and so known to all persons participating in the transaction). Compare Re Lawes; Lawes v Lawes (1881) 20 Ch D 81; 45 LT 453 ; Re Jaques; Hodgson v Braisby [1903] 1 Ch 267; (1902) 88 LT 210; 51 WR 229 . The paragraph below is current to 20 May 2008 [185-1175] Satisfaction of a debt by a legacy When a creditor is given a legacy less than the sum the creditor is owed, there is no presumption of satisfaction either in whole or part.1 However, where the legacy is equal to or greater than the debt, it is presumed to be in discharge of the debt.2 There is no presumption of satisfaction where the debt owed by debtor to creditor fluctuates after the date of the will.3 A donatio mortis causa as well as a legacy may satisfy a debt since the donatio is treated as being in the nature of a legacy and satisfaction will be found where it was intended to satisfy a debt.4 The presumption that a legacy satisfies a debt applies not only to a debt in the sense of a covenant to pay a sum of money but also to a declaration of trust in respect of money.5 Until the presumption arises, extrinsic evidence of the testators real intention is inadmissible.6 When the doctrine that a legacy satisfies a debt operates, the legatee-creditor must elect between the legacy and the debt.7 A widows right to claim under testators family maintenance legislation is not on the same footing as a debt.8 Notes 1 In the Will of Weiss (decd); Davies v Weiss (1946) 48 WALR 37 ; Lambert v Waters [1954] St R Qd 212 at 227; (1953) 28 ALJ 383n per Philp J, Fed C of A (unlike a portion a debt cannot be pro tanto satisfied by a legacy).2 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 804-6; [1938] ALR 530; (1938) 12 ALJ 317 per Rich J. The doctrine rests on the maxim debitor non praesumitur donare: [T]he doctrine is in truth an example of the exercise of jurisdiction of the Court of Chancery to prevent the unconscientious enjoyment of two gifts which it is known were not intended to be cumulative.3 Webb v Webb (1900) 21 LR (NSW) Eq 245 at 251; 17 WN (NSW) 188 per Simpson CJ (the presumption of the satisfaction of a debt by a legacy did not apply because of the debt being a fluctuating and varying amount, of which fact the testator was aware, and which distinguishes it from the case of satisfaction of a fixed debt. The testator, by the codicil, expressly affirms his will, and at that date the debt differed in amount from the amount at the date of the will. It appears to me that the testator did not mean the bequest to be in satisfaction of the debt).4 Harneiss v Public Trustee (1940) 40 SR (NSW) 414; 57 WN (NSW) 157 .5 Russell v White (1895) 16 LR (NSW) Eq 158 at 166 per Owen CJ (the case draws a curious distinction between a transfer of a fund to a trustee for a beneficiary, which is assumed to be a complete gift, and a declaration by the testator that he holds a fund in trust for a beneficiary, which is held not to be complete and to be capable of satisfaction by a legacy).6 In the Will of Weiss (decd); Davies v Weiss (1946) 48 WALR 37 at 40 per Dwyer CJ; Lambert v Waters [1954] St R Qd 212 at 229-30; (1953) 28 ALJ 383n per Philp J, Fed C of A.7 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 810; [1938] ALR 530; (1938) 12 ALJ 317 per Starke J.8 Re Horrocks (decd) [1944] NZLR 314 at 325 per Fair J (for the extent and value of the right are indefinite, it is incapable of exact assessment, it cannot be enforced during the testators lifetime, and is a right which is usually specifically contemplated and provided for by specific provisions in a will. In all these respects it differs from a debt). The paragraph below is current to 20 May 2008 [185-1180] Rebuttal of presumption of satisfaction of a debt by a legacy The presumption that a legacy was intended to satisfy a debt will be rebutted by a direction in the will to pay debts.1

The presumption will be rebutted where there are great differences in the amounts involved.2 The presumption will also be rebutted by differences between the legacy and the prior gift or debt. Only minor circumstances need be shown to take a given case outside the presumption.3 The following have been held sufficiently significant differences: (1) an absolute earlier gift compared to a legacy in strict settlement;4 (2) an annuity payable half-yearly compared to an annuity not payable until a year after the testators death;5 and (3) a legacy equal to or greater than the debt but payable at a different time.6 The presumption may be rebutted where the legacy is of an uncertain or fluctuating nature for example, where the gift is the whole or a part of the testators residuary estate.7 The presumption of the legacy may also be rebutted if the legacy is not charged on land or is not a first charge, though the debt is such a charge,8 or is uncertain.9 Evidence rather than speculation is needed.10 Precise lack of identity between the debt and the legacy will not be fatal where the testator plainly intended the legacy to be in lieu of satisfaction of the debt.11 The presumption prevents the unconscionable claim to enjoy a testamentary disposition intended as a substitution for and not as an addition to a provision already made by the testator and it does so independently of the testators reasons for making the substitution.12 Notes 1 Russell v White (1895) 16 LR (NSW) Eq 158; Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 808; [1938] ALR 530; (1938) 12 ALJ 317 per Starke J; Lambert v Waters [1954] St R Qd 212; (1953) 28 ALJ 383n , Fed C of A.2 Russell v White (1895) 16 LR (NSW) Eq 158.3 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 804 per Rich J, at 808, 809 per Starke J; [1938] ALR 530; (1938) 12 ALJ 317 (this tendency has been regarded as unreal and artificial as the principle itself and the distinctions involved have been said to be so fine and arbitrary as to afford little assistance), (CLR) at 812-13 per Dixon J (rule certainly appears least satisfactory when a legacy is bequeathed to a legatee who happened, by some ordinary business transaction, to have become the testators creditor, for there is no likelihood that the legacy was meant as satisfaction of the debt, and a presumption that it was lacks any natural foundation and contradicts experience, yet in circumstances of family arrangements the rule operates very reasonably).4 Russell v White (1895) 16 LR (NSW) Eq 158.5 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 808 per Starke J, at 813 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 .6 Royal North Shore Hospital v CrichtonSmith (1938) 60 CLR 798 at 808 per Starke J, at 813 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 .7 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 808 per Starke J, at 813 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 .8 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 813; [1938] ALR 530; (1938) 12 ALJ 317 per Dixon J.9 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 808 per Starke J, at 813 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 .10 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 809; [1938] ALR 530; (1938) 12 ALJ 317 per Starke J.11 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 810 per Starke J, at 817 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 .12 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 806 per Rich J, at 815-16 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 (the presumption not rebutted where testator promised under seal to pay an annuity to wife and

thinking erroneously that the annuity would expire with his death, left a similar annuity in his will). The paragraph below is current to 20 May 2008 [185-1185] Satisfaction of legacies by legacies Legacies to the same beneficiary contained in different instruments are presumed to be cumulative on the basis that a testator intends each and every disposition which he or she makes to take effect where these are not mutually inconsistent.1 There will be sufficiently clear contrary indications where:2 (1) the form of the second instrument for example, a simple repetition, suggests it; (2) where the sums and the motive are the same; and (3) where a strongly consistent scheme of benefit can be discerned, rather than casual or routine benefaction through modest pecuniary legacies. The mode of rebutting the presumption is similar to that employed in rebutting the presumption that a legacy satisfies a portion and that a portion satisfies a legacy.3 Notes 1 Re Reschs Will Trusts; Le Cras v Perpetual Trustee Co Ltd [1969] 1 AC 514 , PC.2 Re Reschs Will Trusts; Le Cras v Perpetual Trustee Co Ltd [1969] 1 AC 514 at 548-9 , PC (the scheme was that each of the testators children but one, who was otherwise provided for, should receive substantial annuities of 2000 per annum on protective trusts. This suggested that the testator did not intend to give a double benefit to one child. The child in question, aged one year or thereabouts at the date of the [first instrument], was but a year older at the date of the [second instrument]; no change in circumstance was shown or suggested to explain so great an addition to his legacy as cumulation would involve).3 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 814; [1938] ALR 530; (1938) 12 ALJ 317 per Dixon J (The presumption may be different, as indeed might be expected from the very purpose of testamentary instruments, but the weight attached to identity of amount, conditions, purpose and special motive illustrates a more general mode of reasoning). As to the presumption that a legacy satisfies a portion see [185-1150]. The paragraph below is current to 20 May 2008 [185-1190] Admissibility of oral evidence In considering whether a legacy is adeemed by a later portion, evidence of the circumstances under which the later gift was made, including contemporaneous or substantially contemporaneous declarations of the donor, are admissible for example, statements by the testator to the donee whom the testator directs to give information to accountants in respect of possible gifts.1 Notes 1 Seaborn v Marsden (1926) 26 SR (NSW) 485 at 493-4; 43 WN (NSW) 125 per Long Innes J. Even subsequent statements negativing any intention that the gift should reduce or supersede the legacy have been admitted: Re Leggatt; Griffith v Calder [1908] VLR 385; (1908) 14 ALR 314 .

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[Halsbury's Laws of Australia]

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(D) Satisfaction and Ademption The paragraph below is current to 20 May 2008 [185-1145] Satisfaction Satisfaction is the gift of a thing with the intention that it be taken either wholly or partly in extinguishment of some prior claim of the donee.1 Satisfaction may occur when:2 (1) a covenant to settle property is followed by a gift by will or settlement in favour of the person entitled beneficially under the covenant; (2) a testamentary disposition is followed during the testators lifetime by a gift or settlement in favour of the devisee or legatee; and (3) a legacy is given to a creditor. Though satisfaction is used to describe all three sets of circumstances, ademption is also used to describe the second.3 Equity will consider an obligation to have been fulfilled in a number of different circumstances. Satisfaction occurs where the obligor makes a gift or confers a benefit on the party to whom the obligation is owed with the intention, actual or presumed, that the gift or benefit should satisfy the obligation.4 A legacy at least equal in value and at least as beneficial as the debt will mean equity

presumes an intention on the part of the creditor that the legacy was meant as satisfaction.5 However, this presumption is easily rebutted.6 If the amount of the legacy is less than the amount owed there is no satisfaction.7 On the other hand, if the legacy is larger than the amount owed, the presumption of satisfaction may arise.8 Equity will not presume satisfaction if the legacy is substantially different from what is owed.9 Notes 1 Lord Chichester v Coventry (1867) LR 2 HL 71 at 95 per Lord Romilly.2 Satisfaction only operates in respect of a prior claim of the donee, if he or she has no claim the doctrine cannot apply: Re Hampton [1922] SASR 286 at 291-2 per Gordon J.3 See Lord Chichester v Coventry (1867) LR 2 HL 71 at 90 per Lord Romilly; Re Moores Rents [1917] 1 IR 244. See also Trimmer v Bayne (1802) 7 Ves 508 at 515; 32 ER 205 . Another sense of ademption arises where a testator makes a disposition by will and then, in his or her lifetime, makes a disposition of the property quite inconsistent with the testamentary disposition. The effect of the doctrine is that the testamentary gift is treated as revoked: Read v Van Brakkel (1914) 14 SR (NSW) 124 ; Abernethy v Simpson [2007] NSWSC 186; BC200701291 ..4 Weall v Rice (1831) 2 Russ & M 251; 39 ER 390; Hopwood v Hopwood (1859) 7 HL Cas 728 at 737.5 Atkinson v Webb (1704) 2 Vern 478; 23 ER 907 ; Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798; [1938] ALR 530; (1938) 12 ALJ 317 .6 Hassell v Hawkins (1859) 4 Drew 468; 62 ER 180 .7 Lambert v Waters [1954] St R Qd 212 at 223; (1953) 28 ALJ 383n per Macrossan CJ, Fed C of A.8 Re Rattenberry; Ray v Grant [1906] 1 Ch 667; (1906) 75 LJ Ch 304 .9 Eastwood v Vinke (1731) 2 P Wms 613; 24 ER 883. The paragraph below is current to 20 May 2008 [185-1150] Presumption of satisfaction of a portion by a legacy Where a father or someone in loco parentis makes a gift of a legacy to a child, which is intended to be a portion for the benefit of the child generally, and that parent, during his or her lifetime, subsequently makes a gift in favour of the child in the nature of a portion which is substantially of the same nature as that given by the will, the inter vivos gift will be presumed to have been given in substitution for, or in satisfaction of, the legacy.1 However, a presumption of ademption also arises where a testator, not being a father or a person in loco parentis to a legatee, gives him or her a legacy for a particular purpose and afterwards advances money for a similar purpose.2 The first presumption is grounded on the courts disposition against double portions, is purported to be based on promoting equality among children and to be consistent with the favour presently shown by the law to sharing within the family and with the attempts of parliament through testators family maintenance and family provision legislation to limit the caprice of testators.3 It is also based on the view that a testator has a moral obligation to provide for his or her children and, if the testator leaves a legacy and then provides a portion, he or she is seen to be performing this obligation in anticipation and intending to prepay the legacy.4 The second presumption is based on the likely intention of the testator.5 An example of the second presumption of ademption of a legacy by a gift arises where both dispositions are intended to satisfy the same moral obligation, such as providing for a widow.6 Where the circumstances are not such as to raise a presumption of ademption of a legacy by a gift, the intention that the gift should be taken in satisfaction of the legacy must be brought to the knowledge of the donee at the time of the gift so that, in effect, the gift is made on the condition that the legacy should not be claimed.7 The rule applies not only to a legacy but also to a bequest of a share in residue.8 In the case of a substitutional gift, where the substituted donee is directed to take the share which the original donee would have taken if he or she had survived the testator, the doctrine is applied

against the substituted donee to the same extent as it would be applied against the original donee.9 Both gifts must be in nature of portion. When the donor is the father of or a person in loco parentis to the donee, the presumption of satisfaction or ademption only arises where the two gifts are in the nature of portions. A portion is a provision for the advancement of the child in life.10 It is the making of a more or less permanent, as opposed to a casual, provision for a child or a gift for the purpose of establishing a child in life and a portion is to be contrasted with an unqualified gift in the nature of a cash bounty for personal use or a mere contribution towards maintenance.11 Ademption can also operate in circumstances where a testator, having made the relevant legacy, loses testamentary capacity and the person managing the testators affairs makes an inter vivos gift adeeming the legacy.12 However, where the testator is incapable of selling the property or of altering an existing will to give effect to their intentions, the sale of property under a power of attorney may not adeem the devise of the property under a will.13 Notes 1 Re Lacon; Lacon v Lacon [1891] 2 Ch 482 at 498 , CA. See also Abernethy v Simpson [2007] NSWSC 186; BC200701291 .2 Re Sparrow (decd) [1967] VR 739 at 741 per Little J. See Re Everett (1917) SALR 52 at 65 per Murray J. See also Seaborn v Marsden (1926) 26 SR (NSW) 485 at 495-6; 43 WN (NSW) 125 per Long Innes J (the doctrine rested on at least two and possibly three presumptions).3 Lake v Quinton [1973] 1 NSWLR 111 at 139-40 per Hutley JA, at 121 per Jacobs P, CA(NSW) (reference to the presumption as being that a father does not intend double portions for his children so that one obtains a preference over another or others).4 Seaborn v Marsden (1926) 26 SR (NSW) 485 at 495; 43 WN (NSW) 125 per Long Innes J (citing Re Furness; Furness v Stalkartt [1901] 2 Ch 346 at 349-50; (1901) 84 LT 680 per Joyce J).5 Weall v Rice (1831) 2 Russ & M 251; 39 ER 390; Hopwood v Hopwood (1859) 7 HL Cas 728 at 737.6 Salway v Snowden (1888) 14 VLR 669 (bequest of annuity to widow to acquire residence for herself adeemed by gift of matrimonial home). The purposes of the legacy were not satisfied by the gift where the purpose of the legacy was to erect a church, with all necessary fittings and accessories, and a manse, and the purpose of the gift was to build a church and organ, the church was left incomplete and the gift did not even extend to the manse: Re Leggatt; Griffith v Calder [1908] VLR 385; (1908) 14 ALR 314 .7 Re Everett (1917) SALR 52 at 65-6 per Murray CJ.8 Seaborn v Marsden (1926) 26 SR (NSW) 485 at 495; 43 WN (NSW) 125 per Long Innes J.9 Re Wells; Wells v Begley (1930) 30 SR (NSW) 150; 47 WN (NSW) 26 .10 Lake v Quinton [1973] 1 NSWLR 111 at 122 per Jacobs P, CA(NSW); Taylor v Taylor (1875) LR 20 Eq 155 at 159; 44 LJ Ch 946 per Jessel MR. An example of ademption of a legacy by a portion arose where the testator made residuary gifts to his children in his will, and later declared himself trustee of the moneys in certain savings accounts for five of his daughters, it was held that the residuary gifts to those five children had been adeemed: Re Mills (decd) [1952] SASR 274 . Whether the definition of portion is met will normally be a matter of ascertaining the donor or testators intention, an inquiry which will involve, amongst other things, inquiry into the language of the will and all of the circumstances surrounding the gift: Re Cameron [1999] Ch 386 at 404; [1999] 2 All ER 924; [1999] 3 WLR 394 . See also Meagher R P, Heydon J D and Leeming M J, Meagher Gummow & Lehanes Equity: Doctrines and Remedies, 4th ed, Butterworths, Sydney, 2002, [31-075].11 Re Mills (decd) [1952] SASR 274 at 277-8 per Ligertwood J (gifts in trust for daughters were held to be portions, for even when they came of age the daughters could not access and spend the money by terminating the trusts without recourse to the courts; and they were kept in ignorance of the gifts).12 Re Cameron [1999] Ch 386; [1999] 2 All ER 924; [1999] 3 WLR 394 .13 In the Matter of the affairs of Hartigan; Ex parte the Public Trustee (unreported, WASC, Parker J, 2283 of 1997, 9 December 1997, BC9707385) (followed Mulhall v Kelly [2006] VSC 407; BC200608993 ). See, however, Orr v Slender (2005) 64 NSWLR 671; [2005] NSWSC 1175; BC200510063 (where it was held that the authorised sale under a power of attorney would give rise to an ademption).

The paragraph below is current to 20 May 2008 [185-1155] Satisfaction pro tanto The second provision need not be equal in value or greater than the first provision to attract the presumption of ademption.1 In determining whether a provision has been satisfied in whole or, if it is satisfied pro tanto, to what extent it is satisfied, the appropriate date for the interest of the beneficiary under the provisions to be valued is the date the subject matter of the gift is taken into beneficial enjoyment in possession.2 In ordinary inter vivos gifts or settlements, the date of the gift or settlement is the appropriate date because beneficial enjoyment is not postponed and commences then.3 However, where a portion follows the gift of a life interest in the testator, the appropriate date is the date of the testators death.4 Notes 1 Re Sparrow (decd) [1967] VR 739 at 741 per Little J; Re Pollack; Pollock v Worrall (1885) 28 Ch D 552 at 556; 54 LJ Ch 489; 52 LT 718 per Earl of Selborne LC.2 Lake v Quinton [1973] 1 NSWLR 111 at 123 per Jacobs P, at 134-5 per Street CJ, CA(NSW) (compare Hutley JA at 144).3 Watson v Watson (1864) 33 Beav 574; 55 ER 491 .4 Lake v Quinton [1973] 1 NSWLR 111 at 124 per Jacobs P, at 134-5 per Street CJ, CA(NSW). The paragraph below is current to 20 May 2008 [185-1160] In case of satisfaction of an obligation, donee may elect In a case of ademption, the beneficiary has no choice whether he or she will take the earlier or the later provision. The earlier provision depends solely on the testators bounty and ademption operates by way of revocation of the bounty, in whole or in part. But where a settlor has undertaken an obligation, he or she has no right to terminate that obligation by substituting a different provision by his or her will or by a later settlement.1 Notes 1 Hence, where the different provision would operate as satisfaction, so that the beneficiary cannot take both provisions, he or she is entitled to elect between the two: Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 815; [1938] ALR 530; (1938) 12 ALJ 317 per Dixon CJ (a husband covenanted to pay his wife an annuity of 650 by equal quarterly instalments while she remained chaste. By his will, he directed that income from his residuary estate, up to but not exceeding 650 per annum be paid to his wife by equal quarterly instalments for her life or until she remarried. It was held that the legacy was in satisfaction of the annuity and the wife was put to her election as to which she would take. The court must be satisfied that the testator intended the gift in the will to be a substitute for the gift inter vivos). This could not apply in a case of ademption, that is, where the covenant was entered into after the making of the will, as there is no possibility that the testator intended the gift in the will to operate in substitution for the inter vivos covenant. The paragraph below is current to 20 May 2008 [185-1165] Presumption against double portions The presumption against double portions is rebuttable. In deciding whether the presumption against double portions has been rebutted, it is necessary to consider all the circumstances of each case, in particular the time,1 manner,2 nature, amount and object of the gift,3 as well as any express declaration by the testator that the second gift was intended to be cumulative.4 Portions may be double where one is to the first child and the second portion is partly for the benefit of the same child.5 Thus, if a grandparent pays the grandchilds education expenses, this can be seen by equity as a payment to the child thus adeeming an earlier legacy to that child.6 The presumption may also be rebutted by evidence of the testators intention from the language of the document effecting the second gift. The presumption, in effect, puts the burden of disproving it on the person claiming both portions.7

Slight differences do not rebut the presumption.8 The presumption may also be rebutted by the language of a document made earlier in time than the second. The intention at the time of a will is as important as the intention at the time of a gift inter vivos.9 The presumption will be rebutted where: (1) a will expressly disclaims the idea that the testator had at that time made a fixed and irrevocable plan on which his or her estate should be distributed, and states that the testator contemplated making further advances to his or her children which might effect a more fair distribution and that such advances are not to be taken in satisfaction of the benefits conferred by the will unless they are evidenced by entries in the books of account;10 and (2) the gift made after the will is merely a continuation of a gift promised and partly made before the will.11 The doctrine of ademption may still apply where the later advance of money is merely part of a bargain for which the recipient gives consideration, for the doctrine depends entirely on intention.12 A settlement made pursuant to an order of the court, whether by consent or otherwise, would not necessarily rebut any presumption of ademption. If his or her actual intention was to effect double portions, the presumption is rebutted, but not otherwise.13 A codicil republishing a will does not make the will speak as from its own date for the purpose of reviving a legacy which has been adeemed.14 Differences between the limitations in the two provisions will only exclude the rule against double portions where they are so great as to indicate that the donor did not intend the later to be in satisfaction of the earlier.15 Notes 1 Re Simpson; Millar v Simpson (1906) 7 SR (NSW) 78 at 82; 24 WN (NSW) 4 per Street J (significance was attached to the fact that a gift of substantial amount (1000) was made on the marriage of the donors daughter, which is a time when one would expect that the parent would be making provision for the child).2 Re Simpson; Millar v Simpson (1906) 7 SR (NSW) 78; 24 WN (NSW) 4 (the gift of 1000 as pocket money was held capable of bearing the meaning that it should be invested to provide an annual sum by way of pocket money, thus adeeming a legacy).3 Re Simpson; Millar v Simpson (1906) 7 SR (NSW) 78 at 82; 24 WN (NSW) 4 per Street J.4 Re Mills (decd) [1952] SASR 274 at 277-8 per Ligertwood J (gifts of 500 to each of five daughters were held not to be too small because they represented a substantial part of the testators fortune. The legacies were residuary gifts contingent on the daughters attaining 21, while the interests under the trusts were vested absolutely; this difference was held insignificant, for as each daughter turned 21 the trusts became the same, and there was no rule against an absolute interest adeeming a contingent interest. The family circumstances did not indicate an intention in favour of double portions). See also Parker v Dowling (1916) 16 SR (NSW) 234; 33 WN (NSW) 75 .5 Re Cameron [1999] Ch 386 at 412-413; [1999] 2 All ER 924; [1999] 3 WLR 394 .6 Re Cameron [1999] Ch 386; [1999] 2 All ER 924; [1999] 3 WLR 394 .7 Lake v Quinton [1973] 1 NSWLR 111 at 123 per Jacobs P, CA(NSW).8 Though slight circumstances will rebut the presumption in cases of satisfaction of debts by legacies, they will not suffice to rebut the presumptions against double portions; a substantial or material difference is both necessary and sufficient, unless the testator has made his or her intentions clear, in which case they will be given effect: Lake v Quinton [1973] 1 NSWLR 111 at 123 per Jacobs P, CA(NSW).9 Seaborn v Marsden (1926) 26 SR (NSW) 485 at 497; 43 WN (NSW) 125 per Long Innes J (if a testator in his will declared that it was his intention to subsequently make a settlement upon his daughter, on her then intended and approaching marriage and that for that reason he had by his will given her a less share than she would otherwise have taken under the will, the property subsequently settled

by him upon that daughter on her marriage would not effect an ademption of the share taken by her under the will, notwithstanding the absence of any further evidence as to the settlors intention at the date of such settlement).10 Seaborn v Marsden (1926) 26 SR (NSW) 485 at 498; 43 WN (NSW) 125 per Long Innes J (no evidence in books of account).11 Parker v Dowling (1916) 16 SR (NSW) 234; 33 WN (NSW) 75 .12 Re Sparrow (decd) [1967] VR 739 at 744-5 per Little J (applying Re Horrocks (decd) [1944] NZLR 314 ) (testator bequeathed to his wife an interest for life or until her remarriage in half the net income of his residuary estate, and later made with her a separation agreement by which she was to be paid a weekly amount for life, the later agreement was held to adeem the bequest because an intention that it should do so that it be the wifes sole source of maintenance and support out of his estate could be collected from it).13 Lake v Quinton [1973] 1 NSWLR 111 at 121 per Jacobs P, CA(NSW); Seaborn v Marsden (1926) 26 SR (NSW) 485 at 499; 43 WN (NSW) 125 per Long Innes J.14 Seaborn v Marsden (1926) 26 SR (NSW) 485; 43 WN (NSW) 125 (the codicil can only act upon the will as it existed at the time; and at the time the adeemed legacy formed no part of it. As regards that legacy the codicil can have no effect unless it in effect gives the legacy anew, and a mere republication of the will does not have this effect. But a codicil, though it may not constitute a re-gift of an adeemed legacy, may have strong evidentiary value on the question whether a legacy previously given by the will has or has not been adeemed by a gift subsequent to the will).15 A residuary legacy which was vested, though subject to divestment if the beneficiaries failed to attain 25 years (30 in the case of females), has been held not to be adeemed by a contingent gift subject to long postponement: Lake v Quinton [1973] 1 NSWLR 111 at 121 per Jacobs P, CA(NSW). But that legacy was adeemed by a remainder interest contingent upon attaining 21 years taking effect after the testators life interest, and hence at the same time as the legacy, the difference in the ages of absolute vesting was not so significant as to rebut the presumption of ademption: Lake v Quinton [1973] 1 NSWLR 111 at 121-2 per Jacobs P (with whom Street CJ agreed), at 142-4 per Hutley JA, CA(NSW). The paragraph below is current to 20 May 2008 [185-1170] Gifts must be ejusdem generis The fact that there is a difference between the property given by will and the property the subject of the settlement does not prevent ademption.1 A legacy is not adeemed by a portion where one of the gifts is of land and the other of money on the ground that the two gifts must be ejusdem generis and land and money have never been treated as so assimilated.2 This is not the case in New South Wales where the law has sought to assimilate the position of realty and personalty.3 The rule applies to realty4 one gift can be of realty and another of personalty.5 An obligation to pay money may be adeemed by a bequest of shares.6 The requirement that the two provisions must be ejusdem generis has been said to be overstating the position differences of kind are merely evidence of a double portion.7 It seems that there is no rule that the two gifts must be in money or made with reference to money or pecuniary value. They need not be expressly valued when made.8 Notes 1 Lake v Quinton [1973] 1 NSWLR 111 at 123 per Jacobs P, CA(NSW) (residue and public company shares).2 Re Chirnside (1903) 29 VLR 4 at 14; 9 ALR 71 per ABeckett J (a gift of residue was adeemed by a settlement of inscribed stock). As to the ejusdem generis rule generally see deeds and other instruments [140-640].3 Lake v Quinton [1973] 1 NSWLR 111 at 142 per Hutley J, CA(NSW).4 Public Trustee v Regan (1933) 33 SR (NSW) 361 at 368; 50 WN (NSW) 153 per Long Innes J (the statement that a devise of land could not ordinarily be termed a portion, however correct it may be as applying to England, with its system of entail, can scarcely be regarded as accurate in this country where a considerable proportion of the population is engaged in pastoral pursuits, and where lands, originally acquired in very large areas, are subsequently subdivided and re-subdivided by the holders thereof among their children, and very frequently by way of portion: and I should think it not unlikely that the same practice obtains in other parts of the British Dominions).5 Lake v Quinton [1973] 1 NSWLR 111 at 140-2 per Hutley JA, CA(NSW) (not following Re Chirnside (1903) 29 VLR 4 at 14; 9 ALR 71 per

ABeckett J) (the Parliament of New South Wales has consistently striven to assimilate the position of realty and personalty. Today for all practical purposes in relation to estates there is no difference between realty and personalty).6 Lake v Quinton [1973] 1 NSWLR 111 , CA(NSW).7 Re Mills (decd) [1952] SASR 274 at 277-8 per Ligertwood J.8 Lake v Quinton [1973] 1 NSWLR 111 at 139, 143-4 per Hutley JA, CA(NSW) (on principle, one would think that the rule against double portions would have no mechanical operation and, provided the property settled could be valued in the market, the fact that in one case a provision is made in specie and in another case by the provision of funds should make no differenceThe law would surely be strange if the application of the principle against double portions depended upon the question whether in the instrument of settlement itself the reference was made to the value of the shares where, for stamp duty purposes at any rate, the value had to be calculated and so known to all persons participating in the transaction). Compare Re Lawes; Lawes v Lawes (1881) 20 Ch D 81; 45 LT 453 ; Re Jaques; Hodgson v Braisby [1903] 1 Ch 267; (1902) 88 LT 210; 51 WR 229 . The paragraph below is current to 20 May 2008 [185-1175] Satisfaction of a debt by a legacy When a creditor is given a legacy less than the sum the creditor is owed, there is no presumption of satisfaction either in whole or part.1 However, where the legacy is equal to or greater than the debt, it is presumed to be in discharge of the debt.2 There is no presumption of satisfaction where the debt owed by debtor to creditor fluctuates after the date of the will.3 A donatio mortis causa as well as a legacy may satisfy a debt since the donatio is treated as being in the nature of a legacy and satisfaction will be found where it was intended to satisfy a debt.4 The presumption that a legacy satisfies a debt applies not only to a debt in the sense of a covenant to pay a sum of money but also to a declaration of trust in respect of money.5 Until the presumption arises, extrinsic evidence of the testators real intention is inadmissible.6 When the doctrine that a legacy satisfies a debt operates, the legatee-creditor must elect between the legacy and the debt.7 A widows right to claim under testators family maintenance legislation is not on the same footing as a debt.8 Notes 1 In the Will of Weiss (decd); Davies v Weiss (1946) 48 WALR 37 ; Lambert v Waters [1954] St R Qd 212 at 227; (1953) 28 ALJ 383n per Philp J, Fed C of A (unlike a portion a debt cannot be pro tanto satisfied by a legacy).2 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 804-6; [1938] ALR 530; (1938) 12 ALJ 317 per Rich J. The doctrine rests on the maxim debitor non praesumitur donare: [T]he doctrine is in truth an example of the exercise of jurisdiction of the Court of Chancery to prevent the unconscientious enjoyment of two gifts which it is known were not intended to be cumulative.3 Webb v Webb (1900) 21 LR (NSW) Eq 245 at 251; 17 WN (NSW) 188 per Simpson CJ (the presumption of the satisfaction of a debt by a legacy did not apply because of the debt being a fluctuating and varying amount, of which fact the testator was aware, and which distinguishes it from the case of satisfaction of a fixed debt. The testator, by the codicil, expressly affirms his will, and at that date the debt differed in amount from the amount at the date of the will. It appears to me that the testator did not mean the bequest to be in satisfaction of the debt).4 Harneiss v Public Trustee (1940) 40 SR (NSW) 414; 57 WN (NSW) 157 .5 Russell v White (1895) 16 LR (NSW) Eq 158 at 166 per Owen CJ (the case draws a curious distinction between a transfer of a fund to a trustee for a beneficiary, which is assumed to be a complete gift, and a declaration by the testator that he holds a fund in trust for a beneficiary, which is held not to be complete and to be capable of satisfaction by a legacy).6 In the Will of Weiss (decd); Davies v Weiss (1946) 48 WALR 37 at 40 per Dwyer CJ; Lambert v Waters [1954] St R Qd 212 at 229-30; (1953) 28 ALJ 383n per Philp J, Fed C of A.7 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 810; [1938] ALR 530; (1938) 12 ALJ 317 per Starke J.8 Re Horrocks (decd) [1944] NZLR 314 at 325 per Fair J (for the extent and value of the right are indefinite, it is incapable of exact assessment, it cannot be enforced during the testators lifetime, and is a right which is usually specifically contemplated and provided for by specific provisions in a will. In all these respects it differs from a debt).

The paragraph below is current to 20 May 2008 [185-1180] Rebuttal of presumption of satisfaction of a debt by a legacy The presumption that a legacy was intended to satisfy a debt will be rebutted by a direction in the will to pay debts.1 The presumption will be rebutted where there are great differences in the amounts involved.2 The presumption will also be rebutted by differences between the legacy and the prior gift or debt. Only minor circumstances need be shown to take a given case outside the presumption.3 The following have been held sufficiently significant differences: (1) an absolute earlier gift compared to a legacy in strict settlement;4 (2) an annuity payable half-yearly compared to an annuity not payable until a year after the testators death;5 and (3) a legacy equal to or greater than the debt but payable at a different time.6 The presumption may be rebutted where the legacy is of an uncertain or fluctuating nature for example, where the gift is the whole or a part of the testators residuary estate.7 The presumption of the legacy may also be rebutted if the legacy is not charged on land or is not a first charge, though the debt is such a charge,8 or is uncertain.9 Evidence rather than speculation is needed.10 Precise lack of identity between the debt and the legacy will not be fatal where the testator plainly intended the legacy to be in lieu of satisfaction of the debt.11 The presumption prevents the unconscionable claim to enjoy a testamentary disposition intended as a substitution for and not as an addition to a provision already made by the testator and it does so independently of the testators reasons for making the substitution.12 Notes 1 Russell v White (1895) 16 LR (NSW) Eq 158; Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 808; [1938] ALR 530; (1938) 12 ALJ 317 per Starke J; Lambert v Waters [1954] St R Qd 212; (1953) 28 ALJ 383n , Fed C of A.2 Russell v White (1895) 16 LR (NSW) Eq 158.3 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 804 per Rich J, at 808, 809 per Starke J; [1938] ALR 530; (1938) 12 ALJ 317 (this tendency has been regarded as unreal and artificial as the principle itself and the distinctions involved have been said to be so fine and arbitrary as to afford little assistance), (CLR) at 812-13 per Dixon J (rule certainly appears least satisfactory when a legacy is bequeathed to a legatee who happened, by some ordinary business transaction, to have become the testators creditor, for there is no likelihood that the legacy was meant as satisfaction of the debt, and a presumption that it was lacks any natural foundation and contradicts experience, yet in circumstances of family arrangements the rule operates very reasonably).4 Russell v White (1895) 16 LR (NSW) Eq 158.5 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 808 per Starke J, at 813 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 .6 Royal North Shore Hospital v CrichtonSmith (1938) 60 CLR 798 at 808 per Starke J, at 813 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 .7 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 808 per Starke J, at 813 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 .8 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 813; [1938] ALR 530; (1938) 12 ALJ 317 per Dixon J.9 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 808 per Starke J, at 813 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 .10 Royal North Shore Hospital v Crichton-Smith

(1938) 60 CLR 798 at 809; [1938] ALR 530; (1938) 12 ALJ 317 per Starke J.11 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 810 per Starke J, at 817 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 .12 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 806 per Rich J, at 815-16 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 (the presumption not rebutted where testator promised under seal to pay an annuity to wife and thinking erroneously that the annuity would expire with his death, left a similar annuity in his will). The paragraph below is current to 20 May 2008 [185-1185] Satisfaction of legacies by legacies Legacies to the same beneficiary contained in different instruments are presumed to be cumulative on the basis that a testator intends each and every disposition which he or she makes to take effect where these are not mutually inconsistent.1 There will be sufficiently clear contrary indications where:2 (1) the form of the second instrument for example, a simple repetition, suggests it; (2) where the sums and the motive are the same; and (3) where a strongly consistent scheme of benefit can be discerned, rather than casual or routine benefaction through modest pecuniary legacies. The mode of rebutting the presumption is similar to that employed in rebutting the presumption that a legacy satisfies a portion and that a portion satisfies a legacy.3 Notes 1 Re Reschs Will Trusts; Le Cras v Perpetual Trustee Co Ltd [1969] 1 AC 514 , PC.2 Re Reschs Will Trusts; Le Cras v Perpetual Trustee Co Ltd [1969] 1 AC 514 at 548-9 , PC (the scheme was that each of the testators children but one, who was otherwise provided for, should receive substantial annuities of 2000 per annum on protective trusts. This suggested that the testator did not intend to give a double benefit to one child. The child in question, aged one year or thereabouts at the date of the [first instrument], was but a year older at the date of the [second instrument]; no change in circumstance was shown or suggested to explain so great an addition to his legacy as cumulation would involve).3 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 814; [1938] ALR 530; (1938) 12 ALJ 317 per Dixon J (The presumption may be different, as indeed might be expected from the very purpose of testamentary instruments, but the weight attached to identity of amount, conditions, purpose and special motive illustrates a more general mode of reasoning). As to the presumption that a legacy satisfies a portion see [185-1150]. The paragraph below is current to 20 May 2008 [185-1190] Admissibility of oral evidence In considering whether a legacy is adeemed by a later portion, evidence of the circumstances under which the later gift was made, including contemporaneous or substantially contemporaneous declarations of the donor, are admissible for example, statements by the testator to the donee whom the testator directs to give information to accountants in respect of possible gifts.1 Notes 1 Seaborn v Marsden (1926) 26 SR (NSW) 485 at 493-4; 43 WN (NSW) 125 per Long Innes J. Even subsequent statements negativing any intention that the gift should reduce or supersede the

legacy have been admitted: Re Leggatt; Griffith v Calder [1908] VLR 385; (1908) 14 ALR 314 .

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(D) Satisfaction and Ademption The paragraph below is current to 20 May 2008 [185-1145] Satisfaction Satisfaction is the gift of a thing with the intention that it be taken either wholly or partly in extinguishment of some prior claim of the donee.1 Satisfaction may occur when:2 (1) a covenant to settle property is followed by a gift by will or settlement in favour of the person entitled beneficially under the covenant; (2) a testamentary disposition is followed during the testators lifetime by a gift or settlement in favour of the devisee or legatee; and (3) a legacy is given to a creditor. Though satisfaction is used to describe all three sets of circumstances, ademption is also used to describe the second.3

Equity will consider an obligation to have been fulfilled in a number of different circumstances. Satisfaction occurs where the obligor makes a gift or confers a benefit on the party to whom the obligation is owed with the intention, actual or presumed, that the gift or benefit should satisfy the obligation.4 A legacy at least equal in value and at least as beneficial as the debt will mean equity presumes an intention on the part of the creditor that the legacy was meant as satisfaction.5 However, this presumption is easily rebutted.6 If the amount of the legacy is less than the amount owed there is no satisfaction.7 On the other hand, if the legacy is larger than the amount owed, the presumption of satisfaction may arise.8 Equity will not presume satisfaction if the legacy is substantially different from what is owed.9 Notes 1 Lord Chichester v Coventry (1867) LR 2 HL 71 at 95 per Lord Romilly.2 Satisfaction only operates in respect of a prior claim of the donee, if he or she has no claim the doctrine cannot apply: Re Hampton [1922] SASR 286 at 291-2 per Gordon J.3 See Lord Chichester v Coventry (1867) LR 2 HL 71 at 90 per Lord Romilly; Re Moores Rents [1917] 1 IR 244. See also Trimmer v Bayne (1802) 7 Ves 508 at 515; 32 ER 205 . Another sense of ademption arises where a testator makes a disposition by will and then, in his or her lifetime, makes a disposition of the property quite inconsistent with the testamentary disposition. The effect of the doctrine is that the testamentary gift is treated as revoked: Read v Van Brakkel (1914) 14 SR (NSW) 124 ; Abernethy v Simpson [2007] NSWSC 186; BC200701291 ..4 Weall v Rice (1831) 2 Russ & M 251; 39 ER 390; Hopwood v Hopwood (1859) 7 HL Cas 728 at 737.5 Atkinson v Webb (1704) 2 Vern 478; 23 ER 907 ; Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798; [1938] ALR 530; (1938) 12 ALJ 317 .6 Hassell v Hawkins (1859) 4 Drew 468; 62 ER 180 .7 Lambert v Waters [1954] St R Qd 212 at 223; (1953) 28 ALJ 383n per Macrossan CJ, Fed C of A.8 Re Rattenberry; Ray v Grant [1906] 1 Ch 667; (1906) 75 LJ Ch 304 .9 Eastwood v Vinke (1731) 2 P Wms 613; 24 ER 883. The paragraph below is current to 20 May 2008 [185-1150] Presumption of satisfaction of a portion by a legacy Where a father or someone in loco parentis makes a gift of a legacy to a child, which is intended to be a portion for the benefit of the child generally, and that parent, during his or her lifetime, subsequently makes a gift in favour of the child in the nature of a portion which is substantially of the same nature as that given by the will, the inter vivos gift will be presumed to have been given in substitution for, or in satisfaction of, the legacy.1 However, a presumption of ademption also arises where a testator, not being a father or a person in loco parentis to a legatee, gives him or her a legacy for a particular purpose and afterwards advances money for a similar purpose.2 The first presumption is grounded on the courts disposition against double portions, is purported to be based on promoting equality among children and to be consistent with the favour presently shown by the law to sharing within the family and with the attempts of parliament through testators family maintenance and family provision legislation to limit the caprice of testators.3 It is also based on the view that a testator has a moral obligation to provide for his or her children and, if the testator leaves a legacy and then provides a portion, he or she is seen to be performing this obligation in anticipation and intending to prepay the legacy.4 The second presumption is based on the likely intention of the testator.5 An example of the second presumption of ademption of a legacy by a gift arises where both dispositions are intended to satisfy the same moral obligation, such as providing for a widow.6 Where the circumstances are not such as to raise a presumption of ademption of a legacy by a gift, the intention that the gift should be taken in satisfaction of the legacy must be brought to the knowledge of the donee at the time of the gift so that, in effect, the gift is made on the condition

that the legacy should not be claimed.7 The rule applies not only to a legacy but also to a bequest of a share in residue.8 In the case of a substitutional gift, where the substituted donee is directed to take the share which the original donee would have taken if he or she had survived the testator, the doctrine is applied against the substituted donee to the same extent as it would be applied against the original donee.9 Both gifts must be in nature of portion. When the donor is the father of or a person in loco parentis to the donee, the presumption of satisfaction or ademption only arises where the two gifts are in the nature of portions. A portion is a provision for the advancement of the child in life.10 It is the making of a more or less permanent, as opposed to a casual, provision for a child or a gift for the purpose of establishing a child in life and a portion is to be contrasted with an unqualified gift in the nature of a cash bounty for personal use or a mere contribution towards maintenance.11 Ademption can also operate in circumstances where a testator, having made the relevant legacy, loses testamentary capacity and the person managing the testators affairs makes an inter vivos gift adeeming the legacy.12 However, where the testator is incapable of selling the property or of altering an existing will to give effect to their intentions, the sale of property under a power of attorney may not adeem the devise of the property under a will.13 Notes 1 Re Lacon; Lacon v Lacon [1891] 2 Ch 482 at 498 , CA. See also Abernethy v Simpson [2007] NSWSC 186; BC200701291 .2 Re Sparrow (decd) [1967] VR 739 at 741 per Little J. See Re Everett (1917) SALR 52 at 65 per Murray J. See also Seaborn v Marsden (1926) 26 SR (NSW) 485 at 495-6; 43 WN (NSW) 125 per Long Innes J (the doctrine rested on at least two and possibly three presumptions).3 Lake v Quinton [1973] 1 NSWLR 111 at 139-40 per Hutley JA, at 121 per Jacobs P, CA(NSW) (reference to the presumption as being that a father does not intend double portions for his children so that one obtains a preference over another or others).4 Seaborn v Marsden (1926) 26 SR (NSW) 485 at 495; 43 WN (NSW) 125 per Long Innes J (citing Re Furness; Furness v Stalkartt [1901] 2 Ch 346 at 349-50; (1901) 84 LT 680 per Joyce J).5 Weall v Rice (1831) 2 Russ & M 251; 39 ER 390; Hopwood v Hopwood (1859) 7 HL Cas 728 at 737.6 Salway v Snowden (1888) 14 VLR 669 (bequest of annuity to widow to acquire residence for herself adeemed by gift of matrimonial home). The purposes of the legacy were not satisfied by the gift where the purpose of the legacy was to erect a church, with all necessary fittings and accessories, and a manse, and the purpose of the gift was to build a church and organ, the church was left incomplete and the gift did not even extend to the manse: Re Leggatt; Griffith v Calder [1908] VLR 385; (1908) 14 ALR 314 .7 Re Everett (1917) SALR 52 at 65-6 per Murray CJ.8 Seaborn v Marsden (1926) 26 SR (NSW) 485 at 495; 43 WN (NSW) 125 per Long Innes J.9 Re Wells; Wells v Begley (1930) 30 SR (NSW) 150; 47 WN (NSW) 26 .10 Lake v Quinton [1973] 1 NSWLR 111 at 122 per Jacobs P, CA(NSW); Taylor v Taylor (1875) LR 20 Eq 155 at 159; 44 LJ Ch 946 per Jessel MR. An example of ademption of a legacy by a portion arose where the testator made residuary gifts to his children in his will, and later declared himself trustee of the moneys in certain savings accounts for five of his daughters, it was held that the residuary gifts to those five children had been adeemed: Re Mills (decd) [1952] SASR 274 . Whether the definition of portion is met will normally be a matter of ascertaining the donor or testators intention, an inquiry which will involve, amongst other things, inquiry into the language of the will and all of the circumstances surrounding the gift: Re Cameron [1999] Ch 386 at 404; [1999] 2 All ER 924; [1999] 3 WLR 394 . See also Meagher R P, Heydon J D and Leeming M J, Meagher Gummow & Lehanes Equity: Doctrines and Remedies, 4th ed, Butterworths, Sydney, 2002, [31-075].11 Re Mills (decd) [1952] SASR 274 at 277-8 per Ligertwood J (gifts in trust for daughters were held to be portions, for even when they came of age the daughters could not access and spend the money by terminating the trusts without recourse to the courts; and they were kept in ignorance of the gifts).12 Re Cameron [1999] Ch 386; [1999] 2 All ER 924; [1999] 3 WLR 394 .13 In the Matter of the affairs of Hartigan; Ex parte the Public Trustee (unreported,

WASC, Parker J, 2283 of 1997, 9 December 1997, BC9707385) (followed Mulhall v Kelly [2006] VSC 407; BC200608993 ). See, however, Orr v Slender (2005) 64 NSWLR 671; [2005] NSWSC 1175; BC200510063 (where it was held that the authorised sale under a power of attorney would give rise to an ademption). The paragraph below is current to 20 May 2008 [185-1155] Satisfaction pro tanto The second provision need not be equal in value or greater than the first provision to attract the presumption of ademption.1 In determining whether a provision has been satisfied in whole or, if it is satisfied pro tanto, to what extent it is satisfied, the appropriate date for the interest of the beneficiary under the provisions to be valued is the date the subject matter of the gift is taken into beneficial enjoyment in possession.2 In ordinary inter vivos gifts or settlements, the date of the gift or settlement is the appropriate date because beneficial enjoyment is not postponed and commences then.3 However, where a portion follows the gift of a life interest in the testator, the appropriate date is the date of the testators death.4 Notes 1 Re Sparrow (decd) [1967] VR 739 at 741 per Little J; Re Pollack; Pollock v Worrall (1885) 28 Ch D 552 at 556; 54 LJ Ch 489; 52 LT 718 per Earl of Selborne LC.2 Lake v Quinton [1973] 1 NSWLR 111 at 123 per Jacobs P, at 134-5 per Street CJ, CA(NSW) (compare Hutley JA at 144).3 Watson v Watson (1864) 33 Beav 574; 55 ER 491 .4 Lake v Quinton [1973] 1 NSWLR 111 at 124 per Jacobs P, at 134-5 per Street CJ, CA(NSW). The paragraph below is current to 20 May 2008 [185-1160] In case of satisfaction of an obligation, donee may elect In a case of ademption, the beneficiary has no choice whether he or she will take the earlier or the later provision. The earlier provision depends solely on the testators bounty and ademption operates by way of revocation of the bounty, in whole or in part. But where a settlor has undertaken an obligation, he or she has no right to terminate that obligation by substituting a different provision by his or her will or by a later settlement.1 Notes 1 Hence, where the different provision would operate as satisfaction, so that the beneficiary cannot take both provisions, he or she is entitled to elect between the two: Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 815; [1938] ALR 530; (1938) 12 ALJ 317 per Dixon CJ (a husband covenanted to pay his wife an annuity of 650 by equal quarterly instalments while she remained chaste. By his will, he directed that income from his residuary estate, up to but not exceeding 650 per annum be paid to his wife by equal quarterly instalments for her life or until she remarried. It was held that the legacy was in satisfaction of the annuity and the wife was put to her election as to which she would take. The court must be satisfied that the testator intended the gift in the will to be a substitute for the gift inter vivos). This could not apply in a case of ademption, that is, where the covenant was entered into after the making of the will, as there is no possibility that the testator intended the gift in the will to operate in substitution for the inter vivos covenant. The paragraph below is current to 20 May 2008 [185-1165] Presumption against double portions The presumption against double portions is rebuttable. In deciding whether the presumption against double portions has been rebutted, it is necessary to consider all the circumstances of each case, in particular the time,1 manner,2 nature, amount and object of the gift,3 as well as any express declaration by the testator that the second gift was intended to be cumulative.4 Portions may be double where one is to the first child and the second portion is partly for the benefit of the same child.5 Thus, if a grandparent pays the

grandchilds education expenses, this can be seen by equity as a payment to the child thus adeeming an earlier legacy to that child.6 The presumption may also be rebutted by evidence of the testators intention from the language of the document effecting the second gift. The presumption, in effect, puts the burden of disproving it on the person claiming both portions.7 Slight differences do not rebut the presumption.8 The presumption may also be rebutted by the language of a document made earlier in time than the second. The intention at the time of a will is as important as the intention at the time of a gift inter vivos.9 The presumption will be rebutted where: (1) a will expressly disclaims the idea that the testator had at that time made a fixed and irrevocable plan on which his or her estate should be distributed, and states that the testator contemplated making further advances to his or her children which might effect a more fair distribution and that such advances are not to be taken in satisfaction of the benefits conferred by the will unless they are evidenced by entries in the books of account;10 and (2) the gift made after the will is merely a continuation of a gift promised and partly made before the will.11 The doctrine of ademption may still apply where the later advance of money is merely part of a bargain for which the recipient gives consideration, for the doctrine depends entirely on intention.12 A settlement made pursuant to an order of the court, whether by consent or otherwise, would not necessarily rebut any presumption of ademption. If his or her actual intention was to effect double portions, the presumption is rebutted, but not otherwise.13 A codicil republishing a will does not make the will speak as from its own date for the purpose of reviving a legacy which has been adeemed.14 Differences between the limitations in the two provisions will only exclude the rule against double portions where they are so great as to indicate that the donor did not intend the later to be in satisfaction of the earlier.15 Notes 1 Re Simpson; Millar v Simpson (1906) 7 SR (NSW) 78 at 82; 24 WN (NSW) 4 per Street J (significance was attached to the fact that a gift of substantial amount (1000) was made on the marriage of the donors daughter, which is a time when one would expect that the parent would be making provision for the child).2 Re Simpson; Millar v Simpson (1906) 7 SR (NSW) 78; 24 WN (NSW) 4 (the gift of 1000 as pocket money was held capable of bearing the meaning that it should be invested to provide an annual sum by way of pocket money, thus adeeming a legacy).3 Re Simpson; Millar v Simpson (1906) 7 SR (NSW) 78 at 82; 24 WN (NSW) 4 per Street J.4 Re Mills (decd) [1952] SASR 274 at 277-8 per Ligertwood J (gifts of 500 to each of five daughters were held not to be too small because they represented a substantial part of the testators fortune. The legacies were residuary gifts contingent on the daughters attaining 21, while the interests under the trusts were vested absolutely; this difference was held insignificant, for as each daughter turned 21 the trusts became the same, and there was no rule against an absolute interest adeeming a contingent interest. The family circumstances did not indicate an intention in favour of double portions). See also Parker v Dowling (1916) 16 SR (NSW) 234; 33 WN (NSW) 75 .5 Re Cameron [1999] Ch 386 at 412-413; [1999] 2 All ER 924; [1999] 3 WLR 394 .6 Re Cameron [1999] Ch 386; [1999] 2 All ER 924; [1999] 3 WLR 394 .7 Lake v Quinton [1973] 1 NSWLR 111 at 123 per Jacobs P, CA(NSW).8 Though slight circumstances will rebut the presumption in cases of satisfaction of debts by legacies, they will not suffice to rebut the presumptions against double portions; a substantial or material difference is both necessary and sufficient, unless the testator has made his or her intentions clear, in which case they will be given effect: Lake v Quinton [1973] 1 NSWLR 111 at 123 per Jacobs P, CA(NSW).9 Seaborn v

Marsden (1926) 26 SR (NSW) 485 at 497; 43 WN (NSW) 125 per Long Innes J (if a testator in his will declared that it was his intention to subsequently make a settlement upon his daughter, on her then intended and approaching marriage and that for that reason he had by his will given her a less share than she would otherwise have taken under the will, the property subsequently settled by him upon that daughter on her marriage would not effect an ademption of the share taken by her under the will, notwithstanding the absence of any further evidence as to the settlors intention at the date of such settlement).10 Seaborn v Marsden (1926) 26 SR (NSW) 485 at 498; 43 WN (NSW) 125 per Long Innes J (no evidence in books of account).11 Parker v Dowling (1916) 16 SR (NSW) 234; 33 WN (NSW) 75 .12 Re Sparrow (decd) [1967] VR 739 at 744-5 per Little J (applying Re Horrocks (decd) [1944] NZLR 314 ) (testator bequeathed to his wife an interest for life or until her remarriage in half the net income of his residuary estate, and later made with her a separation agreement by which she was to be paid a weekly amount for life, the later agreement was held to adeem the bequest because an intention that it should do so that it be the wifes sole source of maintenance and support out of his estate could be collected from it).13 Lake v Quinton [1973] 1 NSWLR 111 at 121 per Jacobs P, CA(NSW); Seaborn v Marsden (1926) 26 SR (NSW) 485 at 499; 43 WN (NSW) 125 per Long Innes J.14 Seaborn v Marsden (1926) 26 SR (NSW) 485; 43 WN (NSW) 125 (the codicil can only act upon the will as it existed at the time; and at the time the adeemed legacy formed no part of it. As regards that legacy the codicil can have no effect unless it in effect gives the legacy anew, and a mere republication of the will does not have this effect. But a codicil, though it may not constitute a re-gift of an adeemed legacy, may have strong evidentiary value on the question whether a legacy previously given by the will has or has not been adeemed by a gift subsequent to the will).15 A residuary legacy which was vested, though subject to divestment if the beneficiaries failed to attain 25 years (30 in the case of females), has been held not to be adeemed by a contingent gift subject to long postponement: Lake v Quinton [1973] 1 NSWLR 111 at 121 per Jacobs P, CA(NSW). But that legacy was adeemed by a remainder interest contingent upon attaining 21 years taking effect after the testators life interest, and hence at the same time as the legacy, the difference in the ages of absolute vesting was not so significant as to rebut the presumption of ademption: Lake v Quinton [1973] 1 NSWLR 111 at 121-2 per Jacobs P (with whom Street CJ agreed), at 142-4 per Hutley JA, CA(NSW). The paragraph below is current to 20 May 2008 [185-1170] Gifts must be ejusdem generis The fact that there is a difference between the property given by will and the property the subject of the settlement does not prevent ademption.1 A legacy is not adeemed by a portion where one of the gifts is of land and the other of money on the ground that the two gifts must be ejusdem generis and land and money have never been treated as so assimilated.2 This is not the case in New South Wales where the law has sought to assimilate the position of realty and personalty.3 The rule applies to realty4 one gift can be of realty and another of personalty.5 An obligation to pay money may be adeemed by a bequest of shares.6 The requirement that the two provisions must be ejusdem generis has been said to be overstating the position differences of kind are merely evidence of a double portion.7 It seems that there is no rule that the two gifts must be in money or made with reference to money or pecuniary value. They need not be expressly valued when made.8 Notes 1 Lake v Quinton [1973] 1 NSWLR 111 at 123 per Jacobs P, CA(NSW) (residue and public company shares).2 Re Chirnside (1903) 29 VLR 4 at 14; 9 ALR 71 per ABeckett J (a gift of residue was adeemed by a settlement of inscribed stock). As to the ejusdem generis rule generally see deeds and other instruments [140-640].3 Lake v Quinton [1973] 1 NSWLR 111 at 142 per Hutley J, CA(NSW).4 Public Trustee v Regan (1933) 33 SR (NSW) 361 at 368; 50 WN (NSW) 153 per Long Innes J (the statement that a devise of land could not ordinarily be termed a portion, however correct it may be as applying to England, with its system of entail, can scarcely be regarded as accurate in this country where a considerable proportion of the population is engaged in pastoral pursuits, and where lands, originally acquired in very large areas, are

subsequently subdivided and re-subdivided by the holders thereof among their children, and very frequently by way of portion: and I should think it not unlikely that the same practice obtains in other parts of the British Dominions).5 Lake v Quinton [1973] 1 NSWLR 111 at 140-2 per Hutley JA, CA(NSW) (not following Re Chirnside (1903) 29 VLR 4 at 14; 9 ALR 71 per ABeckett J) (the Parliament of New South Wales has consistently striven to assimilate the position of realty and personalty. Today for all practical purposes in relation to estates there is no difference between realty and personalty).6 Lake v Quinton [1973] 1 NSWLR 111 , CA(NSW).7 Re Mills (decd) [1952] SASR 274 at 277-8 per Ligertwood J.8 Lake v Quinton [1973] 1 NSWLR 111 at 139, 143-4 per Hutley JA, CA(NSW) (on principle, one would think that the rule against double portions would have no mechanical operation and, provided the property settled could be valued in the market, the fact that in one case a provision is made in specie and in another case by the provision of funds should make no differenceThe law would surely be strange if the application of the principle against double portions depended upon the question whether in the instrument of settlement itself the reference was made to the value of the shares where, for stamp duty purposes at any rate, the value had to be calculated and so known to all persons participating in the transaction). Compare Re Lawes; Lawes v Lawes (1881) 20 Ch D 81; 45 LT 453 ; Re Jaques; Hodgson v Braisby [1903] 1 Ch 267; (1902) 88 LT 210; 51 WR 229 . The paragraph below is current to 20 May 2008 [185-1175] Satisfaction of a debt by a legacy When a creditor is given a legacy less than the sum the creditor is owed, there is no presumption of satisfaction either in whole or part.1 However, where the legacy is equal to or greater than the debt, it is presumed to be in discharge of the debt.2 There is no presumption of satisfaction where the debt owed by debtor to creditor fluctuates after the date of the will.3 A donatio mortis causa as well as a legacy may satisfy a debt since the donatio is treated as being in the nature of a legacy and satisfaction will be found where it was intended to satisfy a debt.4 The presumption that a legacy satisfies a debt applies not only to a debt in the sense of a covenant to pay a sum of money but also to a declaration of trust in respect of money.5 Until the presumption arises, extrinsic evidence of the testators real intention is inadmissible.6 When the doctrine that a legacy satisfies a debt operates, the legatee-creditor must elect between the legacy and the debt.7 A widows right to claim under testators family maintenance legislation is not on the same footing as a debt.8 Notes 1 In the Will of Weiss (decd); Davies v Weiss (1946) 48 WALR 37 ; Lambert v Waters [1954] St R Qd 212 at 227; (1953) 28 ALJ 383n per Philp J, Fed C of A (unlike a portion a debt cannot be pro tanto satisfied by a legacy).2 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 804-6; [1938] ALR 530; (1938) 12 ALJ 317 per Rich J. The doctrine rests on the maxim debitor non praesumitur donare: [T]he doctrine is in truth an example of the exercise of jurisdiction of the Court of Chancery to prevent the unconscientious enjoyment of two gifts which it is known were not intended to be cumulative.3 Webb v Webb (1900) 21 LR (NSW) Eq 245 at 251; 17 WN (NSW) 188 per Simpson CJ (the presumption of the satisfaction of a debt by a legacy did not apply because of the debt being a fluctuating and varying amount, of which fact the testator was aware, and which distinguishes it from the case of satisfaction of a fixed debt. The testator, by the codicil, expressly affirms his will, and at that date the debt differed in amount from the amount at the date of the will. It appears to me that the testator did not mean the bequest to be in satisfaction of the debt).4 Harneiss v Public Trustee (1940) 40 SR (NSW) 414; 57 WN (NSW) 157 .5 Russell v White (1895) 16 LR (NSW) Eq 158 at 166 per Owen CJ (the case draws a curious distinction between a transfer of a fund to a trustee for a beneficiary, which is assumed to be a complete gift, and a declaration by the testator that he holds a fund in trust for a beneficiary, which is held not to be complete and to be capable of satisfaction by a legacy).6 In the Will of Weiss (decd); Davies v Weiss (1946) 48 WALR 37 at 40 per Dwyer CJ; Lambert v Waters [1954] St R Qd 212 at 229-30; (1953) 28 ALJ 383n per Philp J, Fed C of A.7 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 810; [1938] ALR 530; (1938) 12

ALJ 317 per Starke J.8 Re Horrocks (decd) [1944] NZLR 314 at 325 per Fair J (for the extent and value of the right are indefinite, it is incapable of exact assessment, it cannot be enforced during the testators lifetime, and is a right which is usually specifically contemplated and provided for by specific provisions in a will. In all these respects it differs from a debt). The paragraph below is current to 20 May 2008 [185-1180] Rebuttal of presumption of satisfaction of a debt by a legacy The presumption that a legacy was intended to satisfy a debt will be rebutted by a direction in the will to pay debts.1 The presumption will be rebutted where there are great differences in the amounts involved.2 The presumption will also be rebutted by differences between the legacy and the prior gift or debt. Only minor circumstances need be shown to take a given case outside the presumption.3 The following have been held sufficiently significant differences: (1) an absolute earlier gift compared to a legacy in strict settlement;4 (2) an annuity payable half-yearly compared to an annuity not payable until a year after the testators death;5 and (3) a legacy equal to or greater than the debt but payable at a different time.6 The presumption may be rebutted where the legacy is of an uncertain or fluctuating nature for example, where the gift is the whole or a part of the testators residuary estate.7 The presumption of the legacy may also be rebutted if the legacy is not charged on land or is not a first charge, though the debt is such a charge,8 or is uncertain.9 Evidence rather than speculation is needed.10 Precise lack of identity between the debt and the legacy will not be fatal where the testator plainly intended the legacy to be in lieu of satisfaction of the debt.11 The presumption prevents the unconscionable claim to enjoy a testamentary disposition intended as a substitution for and not as an addition to a provision already made by the testator and it does so independently of the testators reasons for making the substitution.12 Notes 1 Russell v White (1895) 16 LR (NSW) Eq 158; Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 808; [1938] ALR 530; (1938) 12 ALJ 317 per Starke J; Lambert v Waters [1954] St R Qd 212; (1953) 28 ALJ 383n , Fed C of A.2 Russell v White (1895) 16 LR (NSW) Eq 158.3 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 804 per Rich J, at 808, 809 per Starke J; [1938] ALR 530; (1938) 12 ALJ 317 (this tendency has been regarded as unreal and artificial as the principle itself and the distinctions involved have been said to be so fine and arbitrary as to afford little assistance), (CLR) at 812-13 per Dixon J (rule certainly appears least satisfactory when a legacy is bequeathed to a legatee who happened, by some ordinary business transaction, to have become the testators creditor, for there is no likelihood that the legacy was meant as satisfaction of the debt, and a presumption that it was lacks any natural foundation and contradicts experience, yet in circumstances of family arrangements the rule operates very reasonably).4 Russell v White (1895) 16 LR (NSW) Eq 158.5 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 808 per Starke J, at 813 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 .6 Royal North Shore Hospital v CrichtonSmith (1938) 60 CLR 798 at 808 per Starke J, at 813 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 .7 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 808 per

Starke J, at 813 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 .8 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 813; [1938] ALR 530; (1938) 12 ALJ 317 per Dixon J.9 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 808 per Starke J, at 813 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 .10 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 809; [1938] ALR 530; (1938) 12 ALJ 317 per Starke J.11 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 810 per Starke J, at 817 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 .12 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 806 per Rich J, at 815-16 per Dixon J; [1938] ALR 530; (1938) 12 ALJ 317 (the presumption not rebutted where testator promised under seal to pay an annuity to wife and thinking erroneously that the annuity would expire with his death, left a similar annuity in his will). The paragraph below is current to 20 May 2008 [185-1185] Satisfaction of legacies by legacies Legacies to the same beneficiary contained in different instruments are presumed to be cumulative on the basis that a testator intends each and every disposition which he or she makes to take effect where these are not mutually inconsistent.1 There will be sufficiently clear contrary indications where:2 (1) the form of the second instrument for example, a simple repetition, suggests it; (2) where the sums and the motive are the same; and (3) where a strongly consistent scheme of benefit can be discerned, rather than casual or routine benefaction through modest pecuniary legacies. The mode of rebutting the presumption is similar to that employed in rebutting the presumption that a legacy satisfies a portion and that a portion satisfies a legacy.3 Notes 1 Re Reschs Will Trusts; Le Cras v Perpetual Trustee Co Ltd [1969] 1 AC 514 , PC.2 Re Reschs Will Trusts; Le Cras v Perpetual Trustee Co Ltd [1969] 1 AC 514 at 548-9 , PC (the scheme was that each of the testators children but one, who was otherwise provided for, should receive substantial annuities of 2000 per annum on protective trusts. This suggested that the testator did not intend to give a double benefit to one child. The child in question, aged one year or thereabouts at the date of the [first instrument], was but a year older at the date of the [second instrument]; no change in circumstance was shown or suggested to explain so great an addition to his legacy as cumulation would involve).3 Royal North Shore Hospital v Crichton-Smith (1938) 60 CLR 798 at 814; [1938] ALR 530; (1938) 12 ALJ 317 per Dixon J (The presumption may be different, as indeed might be expected from the very purpose of testamentary instruments, but the weight attached to identity of amount, conditions, purpose and special motive illustrates a more general mode of reasoning). As to the presumption that a legacy satisfies a portion see [185-1150]. The paragraph below is current to 20 May 2008 [185-1190] Admissibility of oral evidence In considering whether a legacy is adeemed by a later portion, evidence of the circumstances under which the later gift was made, including contemporaneous or substantially contemporaneous declarations of the donor, are admissible for example, statements by the testator to the donee whom the testator directs to give information to accountants in respect of possible gifts.1

Notes 1 Seaborn v Marsden (1926) 26 SR (NSW) 485 at 493-4; 43 WN (NSW) 125 per Long Innes J. Even subsequent statements negativing any intention that the gift should reduce or supersede the legacy have been admitted: Re Leggatt; Griffith v Calder [1908] VLR 385; (1908) 14 ALR 314 .

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(III) Principles Relating to Award of Spousal Maintenance The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4025] Definition of maintenance order A maintenance order under the (CTH) Family Law Act 1975 (the Act) is generally an order for the payment of money, whether in a lump sum or by instalments, for the support of the person to be maintained.1 The Full Court of the Family Court of Australia is not clear whether an application for lump sum spousal maintenance must be based on an initial periodic assessment.2 It is possible to seek variation of the amount required to be paid by way of maintenance, in accordance with the changing needs of the applicant or the changing means of the respondent.3 The order generally comes to an end on the death of either party.4 However, as an alternative to the payment of money, a maintenance order under the Act may refer to the right to occupy premises such as the matrimonial home,5 or to the transfer of property for purposes of maintenance.6 It is also possible, if unusual, for the court to order

maintenance in kind, that is, by the provision of goods or services.7 The clear intention of section 83(5A) of the Act is only to ensure that when considering the propriety or adequacy of any consent for spousal maintenance order, for the purposes of section 83(2)(ba) of the Act, the Family Law Courts (being the Family Court of Australia and the Federal Magistrates Court) do not look at that order in isolation from any other financial arrangements which may have been made between the parties, since to do so could clearly lead to injustice in a particular case.8 Notes 1 In the Marriage of Taylor (1977) 15 ALR 266; 3 Fam LR 11,220 at 11,231 per Asche and Dovey JJ, Fam C of A, Full Court.2 In the Marriage of Clauson (1995) 18 Fam LR 693; (1995) FLC 92-595 Fam C of A, Full Court (where a periodic basis for lump sum maintenance was required) (followed by In the Marriage of Ficking (1996) 20 Fam LR 258; 129 FLR 203; (1996) FLC 92-664 Fam C of A, Full Court); In the Marriage of Vautin (1998) 23 Fam LR 627; (1998) FLC 92-827 Fam C of A, Full Court (where a periodic basis for lump sum maintenance was not a prerequisite) (followed by Stein v Stein (2000) 25 Fam LR 727; 155 FLR 81; (2000) FLC 93-004; [2000] FamCA 102 , Full Court; Brown v Brown (2007) 37 Fam LR 59; (2007) FLC 93-316; [2007] FamCA 151 , Full Court).3 As to variation of maintenance orders see [2054155]. Compare In the Marriage of Taylor (1977) 15 ALR 266; 3 Fam LR 11,220 at 11,231 per Asche and Dovey JJ. See also In the Marriage of Anast and Anastopoulos (1981) 7 Fam LR 728; (1982) FLC 91-201 , Fam C of A, Full Court.4 In the Marriage of Taylor (1977) 15 ALR 266; 3 Fam LR 11,220 at 11,231 per Asche and Dovey JJ. See also In the Marriage of Anast and Anastopoulos (1981) 7 Fam LR 728; (1982) FLC 91-201 , Fam C of A, Full Court.5 Mullane v Mullane (1983) 158 CLR 436; 45 ALR 291; 8 Fam LR 777; BC8300059 ; In the Marriage of Florie (1988) 12 Fam LR 7; 90 FLR 158 , Fam C of A, Full Court; In the Marriage of Springbett and Miles (1990) 14 Fam LR 359; 101 FLR 123; (1990) FLC 92-177 . Compare In the Marriage of Carson (1999) 24 Fam LR 360; (1999) FLC 92-835 at 85,691-2; [1999] FamCA 53 .6 (CTH) Family Law Act 1975 s 80(1)(ba). See also ibid ss 77A, 114(3) (as to an injunction ancillary to a maintenance order, for example, in In the Marriage of Walton (1981) FLC 91-006, Fam C of A, Full Court (injunction against husband to allow wifes continued use of car)); In the Marriage of Caska (2001) 28 Fam LR 307; 166 FLR 196; (2002) FLC 93-092; [2001] FamCA 1279 , Full Court (held that it was difficult to see how it could be concluded that (CTH) Family Law Act 1975 s 83(1) could enable the Family Law Courts (being the Family Court of Australia or the Federal Magistrates Court) to vary a lump sum maintenance order which had been fully complied with, and still give any meaning and operation to the words in force in that subsection). 7 Although the court has no specific power to order maintenance in kind, ibid s 80(1)(k) allows the court to make any other order it thinks necessary to make in order to do justice.8 In the Marriage of Caska (2001) 28 Fam LR 307; 166 FLR 196; (2002) FLC 93-092; [2001] FamCA 1279 , Full Court. The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4030] Distinction between maintenance and property orders In contrast to an order for maintenance, a property order under the (CTH) Family Law Act 1975 (the Act), based upon the considerations set out in section 79 of the Act,1 is designed to be a permanent adjustment of the capital assets and liabilities of the parties.2 The order is not subject to variation simply because of changing circumstances of the parties,3 and does not come to an end on the death of a party. 4 Any property order, final or interim, must be taken into account prior to the court considering a maintenance order.5

Notes 1 See [205-5035]. Compare, in relation to (CTH) Family Law Act 1975 s 79(6), In the Marriage of Carson (1999) 24 Fam LR 360; (1999) FLC 92-835 at 85,691-2; [1999] FamCA 53 , Fam C of A, Full Court.2 In the Marriage of Taylor (1977) 15 ALR 266; 3 Fam LR 11,220 at 11,231 per Asche and Dovey JJ, Fam C of A, Full Court. See also Mullane v Mullane (1983) 158 CLR 436; 45 ALR 291; 8 Fam LR 777; BC8300059 .3 In the Marriage of Taylor (1977) 15 ALR 266; 3 Fam LR 11,220 at 11,231 per Asche and Dovey JJ; In the Marriage of Branchflower (1979) 6 Fam LR 188 at 196; (1980) FLC 90-857 per Evatt CJ and Opas J, Fam C of A, Full Court.4 In the Marriage of Taylor (1977) 15 ALR 266; 3 Fam LR 11,220 at 11,231 per Asche and Dovey JJ. As to cessation of maintenance orders see [205-6465].5 (CTH) Family Law Act 1975 s 75(2)(n). See also In the Marriage of Bevan (1993) 19 Fam LR 35 at 39; 120 FLR 283; (1995) FLC 92-600 per Nicholson CJ, Lindenmayer and McGovern JJ, Fam C of A, Full Court; Bouis and Bouis [2010] FamCA 325; BC201050408 at [35] per Watts J, FC of A. The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4035] Basis of maintenance liability A party to a marriage is liable to maintain the other party, to the extent that the first party is reasonably able to do so,1 if the other party is unable to support himself or herself adequately2 by reason of: (1) having the care and control of a child of the marriage under 18 years of age;3 (2) age or physical or mental incapacity for appropriate gainful employment;4 or (3) any other adequate reason,5 having regard to any relevant matter referred to in section 75(2) of the (CTH) Family Law Act 1975 (the Act).6 Where these threshold requirements are met, the Family Law Courts (being the Family Court of Australia, the Family Court of Western Australia and the Federal Magistrates Court) may make such order as it considers proper for the provision of maintenance,7 taking into account only the matters referred to in section 75(2) of the Act.8 The criteria set out in section 75(2) of the Act are to be referred to both in regard to the basic issue of entitlement to maintenance and in assessing the amount of maintenance to be awarded.9 Notes 1 In assessing ability to pay, the court is not limited to considering the respondents actual income, but may consider the partys assets and other resources, overall economic position, and potential earning capacity: Wong v Wong (1976) 11 ALR 669; 2 Fam LR 11,159 at 11,163 per Carmichael J, SC(NSW); In the Marriage of Beck (No 2) (1983) 48 ALR 470; 8 Fam LR 1017 at 1019; (1983) FLC 91-318 , Fam C of A, Full Court. For discussion of the notion of earning

capacity in different contexts (spousal maintenance, child support, and property adjustment) see In the Marriage of Scott (1994) 17 Fam LR 420; 121 FLR 97; (1994) FLC 92-457 ; DJM v JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 ; Stein v Stein (2000) 25 Fam LR 727; 155 FLR 81; (2000) FLC 93-004; [2000] FamCA 102 .2 (CTH) Family Law Act 1975 s 72 implies that each spouse should attempt to support himself or herself where this is reasonable: In the Marriage of Astbury (1978) 4 Fam LR 395 at 398, 399; 34 FLR 173; (1978) FLC 90-494 , Fam C of A, Full Court. The test of ability to support oneself is not the same as the test of whether one is in need, but refers to whether a party can generate funds from his or her own resources or earning capacity to supply his or her own needs: In the Marriage of Eliades (1980) 6 Fam LR 916 at 917 per Nygh J; In the Marriage of Murkin (1980) 5 Fam LR 782 at 784-5; (1980) FLC 90-806 per Nygh J; Wong v Wong (1976) 11 ALR 669; 2 Fam LR 11,159 at 11,164 per Carmichael J, SC(NSW). Adequate self-support imports a standard of living that is reasonable in the circumstances: In the Marriage of Nutting (1978) 30 FLR 555 at 556; (1978) FLC 90-410 per Lindenmayer J; In the Marriage of Richardson (1979) FLC 90-603 at 78,069 per Strauss J, Fam C of A, Full Court; In the Marriage of W (1980) 6 Fam LR 538 at 549; (1980) FLC 90-872 per Nygh J; In the Marriage of Clauson (1995) 18 Fam LR 693 at 711, 712; (1995) FLC 92-595 , Fam C of A, Full Court; Brown v Brown (2007) 37 Fam LR 59; (2007) FLC 93-316; [2007] FamCA 151 , Full Court.3 (CTH) Family Law Act 1975 s 72(1)(a). See ibid s 4(1) (definition of child of a marriage). In ibid s 65DAA, the words care and control are considered in the context of the words parenting orders, living with, and spending time with.4 Ibid s 72(1)(b).5 Ibid s 72(1)(c).6 Ibid s 72(1).7 Ibid s 74. The word proper has been explained to mean appropriate to the circumstances: In the Marriage of Wilson (1989) 13 Fam LR 205 at 210 per Nygh J, at 219 per Kay J; (1989) FLC 92-033 , Fam C of A, Full Court. See also McCrossen v McCrossen (2006) 36 Fam LR 97; (2006) FLC 93-283; [2006] FamCA 868 , Full Court; Brown v Brown (2007) 37 Fam LR 59; (2007) FLC 93-316; [2007] FamCA 151 , Full Court.8 (CTH) Family Law Act 1975 s 75(1).9 Ibid ss 72, 74, 75(1), 75(2). For a summary of the relevant principles see In the Marriage of Bevan (1993) 19 Fam LR 35 at 42; 120 FLR 283; (1995) FLC 92-600 per Nicholson CJ, Lindenmayer and McGovern JJ (the award of spousal maintenance requires: (1) a threshold finding under (CTH) Family Law Act 1975 s 72; (2) consideration of ibid ss 74, 75(2); (3) no fettering principle that pre-separation standard of living must automatically be awarded where the respondents means permit; and (4) discretion exercised in accordance with the provisions of ibid s 74, with reasonableness in the circumstances as the guiding principle). See also Brown v Brown (2007) 37 Fam LR 59; (2007) FLC 93-316; [2007] FamCA 151 Court . The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations , Full

[205-4040] Factors to be considered Section 75(2) of the (CTH) Family Law Act 1975 sets out a list of matters to be taken into account by the court in deciding what award of maintenance is proper.1 These matters are also among the relevant factors to be considered by the court in an application for property settlement.2 The provision does not contain any indication of which matters are to be given more weight in the courts determinations,3 or any method of calculation of what amount of maintenance might be appropriate in a particular case. In practice, some of the matters will overlap, and may be relevant in combination.4 Some of the matters listed are of sufficiently general importance as to be relevant in virtually every set of proceedings,5 while others are of more specialised application.6 Notes 1 (CTH) Family Law Act 1975 ss 74, 75(1). See further [205-4045]-[205-4127].2 As to property settlements see [205-5035]. See generally In the Marriage of Pastrikos (1979) 6 Fam LR 497; (1980) FLC 90-897 , Fam C of A, Full Court; In the Marriage of Anast and Anastopoulos (1981) 7 Fam LR 728; (1982) FLC 91-201 , Fam C of A, Full Court. Also see In the Marriage of Woodcock (1997) 21 Fam LR 393; 137 FLR 14; (1997) FLC 92-739 , Fam C of A, Full Court (held that the doctrine of equitable estoppel does not operate to prevent the court from exercising its jurisdiction to make orders in a particular case under (CTH) Family Law Act 1975 ss 74, 79, 85A).3 In the Marriage of Plut (1987) 11 Fam LR 687 at 696; (1987) FLC 91-834 at 76,275 per Lindenmayer J, Fam C of A, Full Court.4 See, for example, In the Marriage of Petterd (1976) 11 ALR 182 at 186; 1 Fam LR 11,496 at 11,499; 25 FLR 439 per Wood J; In the Marriage of Astbury (1978) 4 Fam LR 395 at 399; 34 FLR 173; (1978) FLC 90-494 , Fam C of A, Full Court.5 See, for example, (CTH) Family Law Act 1975 s 75(2)(a), 75(2)(b), 75(2)(d), 75(2)(g).6 See, for example, ibid s 75(2)(c), 75(2)(f), 75(2)(m). The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4045] Age and state of health The court must consider the age and state of health of each of the parties when determining the liability for, and the extent of, a proper award of maintenance.1 Evidence of these matters, either on their own or in combination with other factors, may be pertinent to indicate the degree to which the applicant lacks the ability for self-support,2 or the extent of the respondents capacity to pay maintenance.3 Notes 1 (CTH) Family Law Act 1975 s 75(2)(a). As to other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040], [205-4050]-[205-4127].2 See, for example, Barkley v Barkley (1976) 11 ALR 403; 1 Fam LR 11,554 at 11,558; 25 FLR 405; (1977) FLC 90-216 per Carmichael J, SC(NSW) (wifes deafness); In the Marriage of Petterd (1976) 11 ALR 182 at 187; 1 Fam LR 11,496 at 11,500; 25 FLR 439 per Wood J (wifes age, ill-health); In the Marriage of Tye (No 2) (1976) 2 Fam LR 11,205 at 11,206; (1976) FLC 90-048 , Fam C of A, Full Court (wifes temporary illness); In the Marriage of Hack (1977) 6 Fam LR 425; (1980) FLC 90-886 per Bell J (wife totally incapacitated); Finnis v Finnis (1978) 4 Fam LN No 15; (1978) FLC 90-437 at 77,215 per Walters J, SC(SA) (wifes age, ill health); Sharp v Sharp (1978) 4 Fam LN No 38; (1978) FLC 90-470 at 77,419-20 per Toose J, SC(NSW) (wifes age, ill health); In the Marriage of Dow-Sainter (1979) 6 Fam LR 684 at 685; (1980) FLC 80-890 , Fam C of A, Full Court (wifes permanent illness); In the Marriage of Bolton (1992) 15 Fam LR 615 at 619; 107 FLR 131; (1992) FLC 92-309 per Cohen J (wifes terminal illness). See also In the Marriage of Bevan (1993) 19 Fam LR 35; 120 FLR 283; (1995) FLC 92-600 , Fam C of A, Full Court. Compare In the Marriage of Lawrie (1981) 7 Fam LR 560; (1980) FLC 91-102 ,

Fam C of A, Full Court (property application, relevance of husbands terminal illness). See further In the Marriage of X (1999) 26 Fam LR 51; (2000) FLC 93-017; [1999] FamCA 2254 , Full Court (where the husband was responsible for the wife contracting genital herpes, court held, relying upon (CTH) Family Law Act 1975 s 75(2)(o), that it is a matter of justice and equity to have regard to that in her favour); In the Marriage of Hunt (2001) 27 Fam LR 422; (2001) FLC 93-064; BC200100511, Fam C of WA, per Barlow J (in respect to her medical illness, the wife has relied on her own affidavit evidence and a report of a treating general practitioner); In the Marriage of Milankov (2002) 28 Fam LR 514; (2002) FLC 93-095; [2002] FamCA 195 , Full Court, (where the wifes mental health had suffered as a result of the breakdown of the marriage, resulting in her suffering from anxiety attacks and depression); AP v ENP (P and P) (2003) FLC 93-161; [2002] FMCAfam 164 per Walters FM (the court had regard to the wife's psychiatric, psychological and emotional health and the likely impact upon her of any order that would have the effect of her losing the ability to reside in the former matrimonial home); Crampton v Crampton (2006) FLC 93-269; [2006] FamCA 528 , Full Court, (whilst the wife has in the past suffered from dysthymic disorder, there is no evidence that this limited her earning capacity, nor that it is likely to in the future, nor is there any reliable evidence as to the probable cost of medication).3 See, for example, In the Marriage of Mackenzie (1978) 4 Fam LR 374 at 379; (1978) FLC 90-496 at 77,576-7 per Strauss J (husbands illness and limited ability to pay); Finnis v Finnis (1978) 4 Fam LN No 15; (1978) FLC 90-437, SC(SA) (husbands retirement, relevance of superannuation); Sharp v Sharp (1978) 4 Fam LN No 38; (1978) FLC 90-470 at 77,419-20 per Toose J, SC(NSW) (husbands retirement, relevance of superannuation); In the Marriage of Mapstone (1979) 5 Fam LR 205; (1979) FLC 90-681 , Fam C of A, Full Court (husband due to retire in four years, relevance of expected superannuation); In the Marriage of Richardson (1979) FLC 90-603, Fam C of A (disparity in ages of parties, relevance of husbands superannuation). See also In the Marriage of Jenner (1983) 9 Fam LR 549; (1984) FLC 91-544 per Gee J ; In the Marriage of Mitchell (1995) 19 Fam LR 44; 120 FLR 292; (1995) FLC 92-601 , Fam C of A, Full Court. The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4050] Income, property and financial resources The income,1 property2 and financial resources of each of the parties are to be taken into account by the court when determining the liability for, and the extent of, an appropriate order for maintenance.3 The term financial resources extends beyond the scope of income and property4 to include all sources of financial advantage and benefit reasonably available to a party,5 whether or not currently utilised.6 The phrase financial resources is not defined in the (CTH) Family Law Act 1975, however, it means something other than property and income.7 The advantages or benefits available to a party may in some circumstances relate to property belonging to third parties.8 Notes 1 For the meaning of income see Wong v Wong (1976) 11 ALR 669; 2 Fam LR 11,159 at 11,161 , SC(NSW) (proceeds of regular gambling included); In the Marriage of Whitford (1979) 24 ALR 424; 4 Fam LR 754; 35 FLR 445; (1979) FLC 90-612 at 78,142 , Fam C of A, Full Court (court noting that husbands affairs arranged so as to minimise income taxation). See also In the Marriage of W (1980) 6 Fam LR 538 at 550; (1980) FLC 90-872 per Nygh J . Inalienability does not preclude a right or interest from being categorised as property: Mullane v Mullane (1983) 158 CLR 436; 45 ALR 291; 8 Fam LR 777 at 78,071-2; BC8300059, HC of A ; (CTH) Family Law Rules 2004 r 13.04(1)(a), 13.04(1)(b) (requires party to a financial case to make full and frank disclosure of the partys financial circumstances including the partys earnings, including income paid or assigned to another party, person or legal entity, and income

earned by a legal entity which is fully or partially owned or controlled by a party).2 For the meaning of property see In the Marriage of Duff (1977) 15 ALR 476; 3 Fam LR 11,211 at 11,215-19 , Fam C of A, Full Court; In the Marriage of Bailey (1978) 20 ALR 199; 4 Fam LR 86 at 93-5; 33 FLR 10 , Fam C of A, Full Court. See also [205-5020]. (CTH) Family Law Act 1975 s 90AD extends the definition of both matrimonial cause and property contained in ibid s 4(1). Thus, in considering the definition of matrimonial cause, a debt owed by a party to a marriage is to be treated as property: ibid s 90AD(1). In the context of ibid s 114(1)(e), property is to include a debt owed by a party to a marriage: ibid s 90AD(2).3 Ibid s 75(2)(b). As to the other factors to be taken into account when determining a proper award for maintenance see [205-4040], [2054045], [205-4055]-[205-4127]. As to the terms of any property order made or proposed to be made under ibid s 79 see [205-4115].4 In the Marriage of Kelly (No 2) (1981) 7 Fam LR 762 at 769-73; (1981) FLC 91-108 , Fam C of A, Full Court.5 In the Marriage of Kelly (No 2) (1981) 7 Fam LR 762 at 769-73; (1981) FLC 91-108 , Fam C of A, Full Court. See, for example, In the Marriage of Tiley (1980) 6 Fam LR 528; (1980) FLC 90-898 at 75,658 , Fam C of A, Full Court (partys de facto control of company or trust); In the Marriage of Whitehead (1979) 5 Fam LR 308 at 317; (1979) FLC 90-673 at 78,584 (wifes expectation of benefit from discretionary trust); In the Marriage of Howard; Howard Developments Pty Ltd (intervener) (1982) 45 ALR 185; 8 Fam LR 441 at 451; (1982) FLC 91-279 , Fam C of A, Full Court (husbands ability to borrow money and obtain other advantages from his family); In the Marriage of Burton (1978) 24 ALR 378; 4 Fam LR 783; 33 FLR 505n; (1979) FLC 90-622 at 78,130 per Opas J; In the Marriage of Ferguson (1978) 4 Fam LR 312 at 324; 34 FLR 342; (1978) FLC 90-500 per Strauss J , Fam C of A, Full Court (partys assistance from relatives); In the Marriage of Crapp (1979) 24 ALR 671; 5 Fam LR 47; 35 FLR 153; (1979) FLC 90-615 at 78,183 per Fogarty J , Fam C of A, Full Court; In the Marriage of Bailey (1978) 20 ALR 199; 4 Fam LR 86 at 93-5; 33 FLR 10 , Fam C of A, Full Court (expectations of future superannuation). As to treatment of superannuation interests in financial proceedings between spouses see (CTH) Family Law Act 1975 Pt VIIIB, [205-5147] and Stephens v Stephens (2007) 212 FLR 362; (2007) FLC 93-336; [2007] FamCA 680 (contrast, control of a family trust in the absence of beneficial entitlement was insufficient to permit the assets of the Trust to be treated as the property of the party having that control).6 See, for example, In the Marriage of Vartikian (1984) 10 Fam LR 165 at 176; (1984) FLC 91-334 , Fam C of A (husbands leaving part of house untenanted). See also In the Marriage of Beck (No 2) (1983) 48 ALR 470; 8 Fam LR 1017 at 1019; (1983) FLC 91-318 , Fam C of A, Full Court. As to the effect of the marriage on earning capacity see [205-4100].7 In the Marriage of Kelly (No 2) (1981) 7 Fam LR 762; (1981) FLC 91-108 , Fam C of A, Full Court; In the Marriage of Coulter (1989) 13 Fam LR 421; 96 FLR 375; (1990) FLC 92-104 , Fam C of A, Full Court.8 See, for example, In the Marriage of Kelly (No 2) (1981) 7 Fam LR 762 at 769-73; (1981) FLC 91-108 , Fam C of A, Full Court. See, for example, In the Marriage of Tiley (1980) 6 Fam LR 528; (1980) FLC 90-898 at 75,658 , Fam C of A, Full Court (partys de facto control of company or trust); In the Marriage of Howard; Howard Developments Pty Ltd (intervener) (1982) 45 ALR 185; 8 Fam LR 441 at 451; (1982) FLC 91-279 , Fam C of A, Full Court (husbands ability to borrow money and obtain other advantages from his family); In the Marriage of Ferguson (1978) 4 Fam LR 312 at 324; 34 FLR 342; (1978) FLC 90-500 per Strauss J , Fam C of A, Full Court (partys assistance from relatives); AB v ZB (2002) 30 Fam LR 591; 173 FLR 49; (2003) FLC 93-140; [2002] FamCA 1178 per Mullane J (where wife's parents assisted the parties by minding the children frequently when the wife was working outside the home); In the Marriage of BAR and JMR (No 2) (2005) 33 Fam LR 600; 192 FLR 15; (2005) FLC 93-231; [2005] FamCA 386 per Young J (the taking into account of the eligibility of either party for a pension allowance or benefit under any superannuation fund or scheme). The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4055] Physical and mental capacity for employment The court must consider the

physical and mental capacity of each party for appropriate gainful employment when determining the liability for, and the extent of, a proper award of maintenance.1 The court is not limited to details of actual employment, but may assess the partys position on the basis of what type of employment would be appropriate.2 While there is an expectation that parties should generally seek employment where possible,3 assessment of the relevant circumstances will include the age, health and skills of the party concerned,4 other responsibilities of the person (such as care of children),5 length of absence from the work force 6 and the state of the employment market, 7 among other matters.8 It has been stated that the court is entitled to take notice of Australian and overseas studies pointing to the detrimental effects for a spouses earning capacity and employment opportunities of tasks such as child rearing undertaken during the marriage.9 However, judicial notice of such material will not be seen as a substitute for evidence in the particular case.10 Notes 1 (CTH) Family Law Act 1975 s 75(2)(b). As to other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040]-[205-4050], [205-4060]-[2054127].2 In the Marriage of Astbury (1978) 4 Fam LR 395 at 398, 399; 34 FLR 173; (1978) FLC 90-494 , Fam C of A, Full Court; In the Marriage of Gyopar (1986) FLC 91-769 at 75,610, 75,611 per Treyvaud J. See also In the Marriage of Bolton (1992) 15 Fam LR 615 at 622; 107 FLR 131; (1992) FLC 92-309 per Cohen J. Note also N v N (1996) 142 FLR 236; (1997) FLC 92-782 (in the circumstances, applicants former earning capacity as a sex worker should be disregarded); Levick v Levick (2006) FLC 93-254 per Moore J (the husbands considerable skills and acumen in his chosen area of work). For discussion of the notion of earning capacity in various contexts including that of spousal maintenance see DJM v JLM (1998) 23 Fam LR 396; (1998) FLC 92-816; [1998] FamCA 97 , Full Court.3 In the Marriage of Astbury (1978) 4 Fam LR 395 at 398, 399; 34 FLR 173; (1978) FLC 90-494 , Fam C of A, Full Court; In the Marriage of Gyopar (1986) FLC 91-769 at 75,610-11 per Treyvaud J; In the Marriage of Taguchi (1987) FLC 91-836 at 76,297, Fam C of A, Full Court; In the Marriage of Dein (1989) 12 Fam LR 853; 95 FLR 108 ; In the Marriage of Abdo (1989) 12 Fam LR 861; 94 FLR 379; (1989) FLC 92013 .4 In the Marriage of Astbury (1978) 4 Fam LR 395 at 398; 34 FLR 173; (1978) FLC 90494 , Fam C of A, Full Court; Barkley v Barkley (1976) 11 ALR 403; 1 Fam LR 11,554 at 11,558; 25 FLR 405; (1977) FLC 90-216 per Carmichael J, SC(NSW); In the Marriage of Petterd (1976) 11 ALR 182; 1 Fam LR 11,496 at 11,500; 25 FLR 439 ; In the Marriage of De Mooy (1978) FLC 90-411 at 77,095 per Simpson J; In the Marriage of Kayes (1999) 24 Fam LR 512; (1999) FLC 92-846; [1999] FamCA 257, Full Court ; In the Marriage of BAR and JMR (No 2) (2005) 33 Fam LR 600; 192 FLR 15; (2005) FLC 93-231; [2005] FamCA 386 per Young J ; Turnbull and Turnbull (2006) FLC 93-307; [2006] FMCAfam 495; BC200608102 per Scarlett FM .5 In the Marriage of Lusby (1977) 30 FLR 180; 3 Fam LN No 85; (1977) FLC 90311 at 76,654 , Fam C of A, Full Court; In the Marriage of Brady (1978) 34 FLR 422; 4 Fam LN No 54; (1978) FLC 90-513 ; In the Marriage of Townsend (1994) 18 Fam LR 505; (1995) FLC 92-569 , Fam C of A, Full Court; Farmer v Bramley (2000) 27 Fam LR 316; (2000) FLC 93060; [2000] FamCA 1615 , Full Court; T v T (Pension Splitting) (2006) 35 Fam LR 181; 198 FLR 50; (2006) FLC 93-263; [2006] FamCA 207 per Watts J .6 In the Marriage of Hope (1977) 3 Fam LN No 61; (1977) FLC 90-294 at 76,561 per Marshall J; In the Marriage of Whitford (1979) 24 ALR 424; 4 Fam LR 754 at 761; 35 FLR 445; (1979) FLC 90-612 at 78,146 , Fam C of A, Full Court; In the Marriage of Mitchell (1995) 19 Fam LR 44 at 61; 120 FLR 292; (1995) FLC 92-601 , Fam C of A, Full Court, (taking into account research as a form of background information, there are significant advantages to the court being able to take judicial notice of research concerning the economic consequences of marriage and its dissolution); In the Marriage of Figgins (2002) 29 Fam LR 544; 173 FLR 273; (2002) FLC 93-122; [2002] FamCA 688 , Full Court; Causero v Causero (2006) FLC 93-299; [2006] FamCA 1290 , Full Court.7 In the Marriage of Astbury (1978) 4 Fam LR 395 at 399; 34 FLR 173; (1978) FLC 90-494 , Fam C of A, Full Court; Barkley v Barkley (1976) 11 ALR 403; 1 Fam LR 11,554 at 11,588; 25 FLR 405; (1977) FLC 90-216 per Carmichael J, SC(NSW). See also In the Marriage of

Mitchell (1995) 19 Fam LR 44 at 61; 120 FLR 292; (1995) FLC 92-601 . See also N v N (1996) 142 FLR 236; (1997) FLC 92-782 .8 See, for example, In the Marriage of Patterson (1979) FLC 90-705 at 78,760 per Wood J, Fam C of A; Re Q (1994) 18 Fam LR 442 at 446 per Kay J (husband in gaol, unable to provide maintenance for wife).9 In the Marriage of Mitchell (1995) 19 Fam LR 44 at 61, 62; 120 FLR 292; (1995) FLC 92-601 , Fam C of A, Full Court. See also N v N (1996) 142 FLR 236; (1997) FLC 92-782 ; In the Marriage of Figgins (2002) 29 Fam LR 544; 173 FLR 273; (2002) FLC 93-122; [2002] FamCA 688 , Full Court; Causero v Causero (2006) FLC 93-299; [2006] FamCA 1290 , Full Court.10 In the Marriage of Mitchell (1995) 19 Fam LR 44 at 62; 120 FLR 292; (1995) FLC 92-601 , Fam C of A, Full Court; In the Marriage of Figgins (2002) 29 Fam LR 544; 173 FLR 273; (2002) FLC 93-122; [2002] FamCA 688 , Full Court; Causero v Causero (2006) FLC 93-299; [2006] FamCA 1290 , Full Court. The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4060] Care or control of child of marriage The court must take into account whether either party has the care or control of a child of the marriage who has not attained the age of 18 years when determining the liability for, and the extent of, an appropriate order for maintenance.1 This factor may influence, for example, the extent to which it is reasonable for the caretaker parent to obtain employment,2 or the particular form of order made by the court for spousal maintenance.3 Notes 1 (CTH) Family Law Act 1975 s 75(2)(c). See also ibid s 4(1) (definition of child of the marriage). This is not applicable in respect of children who are over 18 years of age at the time of the hearing: In the Marriage of Rainbird (1977) 3 Fam LR 11,368 at 11,372; (1977) FLC 90256 at 76,377 per Wood J. Compare [205-4075], [205-4125]. As to other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040]-[2054055], [205-4065]-[205-4127].2 In the Marriage of Lusby (1977) 30 FLR 180; 3 Fam LN No 85; (1977) FLC 90-311 at 76,654 , Fam C of A, Full Court; In the Marriage of Evans (1978) 30 FLR 566n; 4 Fam LN No 13, Fam C of A; In the Marriage of Burton (1978) 24 ALR 378; 4 Fam LR 783; 33 FLR 505n; (1979) FLC 90-622 at 78,131 per Opas J.3 See, for example, In the Marriage of Burton (1978) 24 ALR 378; 4 Fam LR 783; 33 FLR 505n; (1979) FLC 90-622 (wifes maintenance to cease when youngest child turned 18 years of age or became selfsupporting); In the Marriage of Richardson (1979) FLC 90-603 (lump sum maintenance). The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4065] Commitments necessary for self-support In determining the liability for, and the extent of, a proper award for maintenance, the court must take into account the commitments of each of the parties that are necessary to enable the party to support himself or herself.1 In this context, the word necessary may not merely refer to what is absolutely essential, but to what is reasonably appropriate in the circumstances.2 A party may not avoid liability to pay maintenance,3 or, on the other hand, seek an inappropriately large amount of maintenance, on the basis of unreasonably incurred commitments or expenditure.4

Notes 1 (CTH) Family Law Act 1975 s 75(2)(d)(i). Formerly, the paragraph referred to the financial needs and obligations of each of the parties: see In the Marriage of Lutzke (1979) 5 Fam LR 553; (1979) FLC 90-714 ; In the Marriage of Lawrie (1981) 7 Fam LR 560; (1980) FLC 91102 , Fam C of A, Full Court. As to other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040]-[205-4060], [205-4070]-[2054127].2 In the Marriage of Tuck (1979) 7 Fam LR 492 at 504 per Evatt CJ and Murray J, at 511 per Strauss J; (1981) FLC 91-021 , Fam C of A, Full Court (meaning of necessary in the former (CTH) Family Law Act 1975 s 76(3) (repealed)); In the Marriage of Tyson (1993) 16 Fam LR 425 at 435 . See the stricter approach adopted in In the Marriage of Mee and Ferguson (1986) 10 Fam LR 971 at 977, 978; 84 FLR 179; (1986) FLC 91-716 , Fam C of A, Full Court (child maintenance).3 In the Marriage of Kutcher (1978) FLC 90-453 at 77,310, 77,311 per Murray J. Compare In the Marriage of Mee and Ferguson (1986) 10 Fam LR 971 at 977, 978; 84 FLR 179; (1986) FLC 91-716 , Fam C of A, Full Court (child maintenance). See also In the Marriage of Tyson (1993) 16 Fam LR 425 at 435, 436 , Fam C of A, Full Court.4 See, for example, In the Marriage of Berta (1988) 12 Fam LR 191 at 197; (1988) FLC 91-916 , Fam C of A, Full Court; Debs v Debs (1978) 4 Fam LN No 48, SC(NSW) (personal debt unreasonably incurred by wife after separation). The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4070] Commitments necessary for support of child or other person The court must consider, when determining the liability for, and the extent of, a proper award of maintenance, the necessary1 commitments of each of the parties to enable the party to support a child or another person whom the party has a duty to maintain.2 Notes 1 As to the interpretation of necessary see [205-4065].2 (CTH) Family Law Act 1975 s 75(2)(d)(ii). In Stein v Stein (2000) 25 Fam LR 727; 155 FLR 81; (2000) FLC 93-004 at 87,127; [2000] FamCA 102 , Full Court, the court noted (CTH) Family Law Act 1975 s 75(2)(d)(ii) was more relevant in determining the capacity of the respondent to pay than the extent of the applicants need for support. Formerly, the paragraph referred to the financial needs and obligations of each of the parties: In the Marriage of Lutzke (1979) 5 Fam LR 553; (1979) FLC 90-714 ; In the Marriage of Lawrie (1981) 7 Fam LR 560; (1980) FLC 91-102 , Fam C of A, Full Court. It is likely that in this context the term duty refers to a legal duty rather than merely a moral duty. Compare the interpretation of similar terminology in (CTH) Family Law Act 1975 s 66C dealing with child maintenance: In the Marriage of Ryan (1988) 12 Fam LR 529 at 533; (1988) FLC 91-970 ; In the Marriage of Hartcher and Vick (1991) 15 Fam LR 149 at 153; 105 FLR 230; (1991) FLC 92-262 , Fam C of A, Full Court (disapproved on this point In the Marriage of Gerges (1990) 14 Fam LR 535; (1990) FLC 92-204 , Fam C of A); In the Marriage of Vautin (1998) 23 Fam LR 627; (1998) FLC 92-827 , Fam C of A, Full Court; Re AM (Adult Child Maintenance) (2006) 35 Fam LR 319; 198 FLR 221; (2006) FLC 93-262; [2006] FamCA 351 per Carmody J . However, a moral duty may be relevant under other paragraphs of this provision: see, for example, (CTH) Family Law Act 1975 s 75(2)(e). As to other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040]-[205-4065], [205-4075]-[205-4127]. The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation

For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4075] Responsibilities to support any other person The court must direct attention to the responsibilities of either party to support any other person when determining the liability for, and the extent of, a proper award of maintenance.1 This provision has been construed to extend to persons whom a party has merely a moral duty to assist.2 Such a responsibility may be claimed by the applicant3 or by the respondent.4 There is no automatic priority to be accorded to a partys former spouse over a partys current partner or family responsibilities.5 The court must consider in each case how much weight should be given to the fact that a party has assumed a responsibility to another person or persons.6 However, if some other source of funds is available to support those persons this will be relevant to the courts assessment.7 Notes 1 (CTH) Family Law Act 1975 s 75(2)(e). As to other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040]-[205-4070], [205-4080]-[2054127].2 See, for example, In the Marriage of Soblusky (1976) 12 ALR 699; 2 Fam LR 11,528 at 11,553; 28 FLR 81; (1976) FLC 90-124 , Fam C of A, Full Court; In the Marriage of Axtell (1982) 7 Fam LR 931 at 937, 938; 58 FLR 276; (1982) FLC 91-208 , Fam C of A, Full Court; In the Marriage of Vautin (1998) 23 Fam LR 627; (1998) FLC 92-827 , Fam C of A, Full Court; Re AM (Adult Child Maintenance) (2006) 35 Fam LR 319; 198 FLR 221; (2006) FLC 93-262; [2006] FamCA 351 per Carmody J .3 In the Marriage of Aroney (1979) 5 Fam LR 535 at 538, 539 per Nygh J. Compare In the Marriage of W (1980) 6 Fam LR 538 at 550; (1980) FLC 90872 , Fam C of A; In the Marriage of Gyopar (1986) FLC 91-769 at 75,611. See also In the Marriage of FM (1996) 21 Fam LR 237; 135 FLR 398; (1997) FLC 92-738 per McGarth R .4 In the Marriage of Hope (1977) 3 Fam LN No 61; (1977) FLC 90-294 at 76,560 per Marshall J; Hellier v Hellier (1976) 2 Fam LR 11,446 at 11,488 per Neasey J, SC(TAS); In the Marriage of Soblusky (1976) 12 ALR 699; 2 Fam LR 11,528 at 11,553; 28 FLR 81; (1976) FLC 90-124 , Fam C of A, Full Court.5 In the Marriage of Murkin (1980) 5 Fam LR 782 at 785; (1980) FLC 90806 per Nygh J; In the Marriage of Soblusky (1976) 12 ALR 699; 2 Fam LR 11,528 at 11,553; 28 FLR 81; (1976) FLC 90-124 , Fam C of A, Full Court (disapproving on this point Van Dongen v Van Dongen (1976) 1 Fam LR 11,290 , SC(TAS)); In the Marriage of Axtell (1982) 7 Fam LR 931 at 937-8; 58 FLR 276; (1982) FLC 91-208 , Fam C of A, Full Court (disapproving on this point In the Marriage of Lutzke (1979) 5 Fam LR 553; (1979) FLC 90-714 ; In the Marriage of Ostrofski (1979) 5 Fam LR 685; (1979) FLC 90-730 ; In the Marriage of Baber (1980) 6 Fam LR 796 ).6 In the Marriage of Soblusky (1976) 12 ALR 699; 2 Fam LR 11,528 at 11,553; 28 FLR 81; (1976) FLC 90-124 , Fam C of A, Full Court; In the Marriage of Axtell (1982) 7 Fam LR 931 at 938; 58 FLR 276; (1982) FLC 91-208 , Fam C of A, Full Court.7 In the Marriage of Baber (1980) 6 Fam LR 796 at 800 per Lambert J; In the Marriage of Axtell (1982) 7 Fam LR 931 at 938; 58 FLR 276; (1982) FLC 91-208 , Fam C of A, Full Court. Compare In the Marriage of W (1980) 6 Fam LR 538 at 550; (1980) FLC 90-872 per Nygh J. See Brown v Brown (2007) 37 Fam LR 59; (2007) FLC 93-316; [2007] FamCA 151 , Full Court. The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4080] Eligibility for pension, allowance or benefit In determining the liability for, and the extent of, an appropriate order for maintenance, the court is directed, subject to qualification,1 to take into account the eligibility2 of either party for a pension, allowance or benefit under:

(1) any law of the Commonwealth, a State or Territory or another country;3 or (2) any superannuation fund or scheme, whether the fund or scheme was established, or operates, within or outside Australia,4 and the rate of any such pension, allowance or benefit being paid to either party.5 The qualification is that, in dealing with an application for spousal maintenance, the court must disregard any entitlement of the party whose maintenance is under consideration to an income tested pension, allowance or benefit.6 Notes 1 (CTH) Family Law Act 1975 s 75(3).2 For the meaning of eligibility see In the Marriage of Richardson (1979) FLC 90-603 at 78,071 per Goldstein J. Compare In the Marriage of Petterson (1979) 5 Fam LR 628 at 631; (1979) FLC 90-717 , Fam C of WA (eligibility held to refer only to cases of present entitlement, which appears incorrect on this point).3 (CTH) Family Law Act 1975 s 75(2)(f)(i).4 Ibid s 75(2)(f)(ii). As to the significance of actually received or expected superannuation benefits see In the Marriage of Bailey (1978) 20 ALR 199; 4 Fam LR 86 at 92-5; 33 FLR 10 , Fam C of A, Full Court; In the Marriage of Crapp (1979) 24 ALR 671; 5 Fam LR 47; 35 FLR 153; (1979) FLC 90-615 , Fam C of A, Full Court; In the Marriage of Mapstone (1979) 5 Fam LR 205 at 208, 209; (1979) FLC 90-681 , Fam C of A, Full Court; In the Marriage of Murkin (1980) 5 Fam LR 782 at 785, 786; (1980) FLC 90-806 ; In the Marriage of Perrett (1989) 13 Fam LR 464; 96 FLR 368 , Fam C of A, Full Court; Campbell v Kuskey (1998) 22 Fam LR 674; (1998) FLC 92-795 Fam C of A, Full Court; In the Marriage of Woollams (2004) 32 Fam LR 625; (2004) FLC 93-195; [2004] FCWA 32 per Thackray AJ ; Lesbirel v Lesbirel (2006) FLC 93-301; [2006] FamCA 1287 ; SDM v JCM (2006) 36 Fam LR 223; 202 FLR 403; (2006) FLC 93-282; [2006] FamCA 840 ; M v M (2006) 37 Fam LR 150; 203 FLR 122; (2006) FLC 93-281; [2006] FamCA 913 , Full Court; T v T (Pension Splitting) (2006) 35 Fam LR 181; 198 FLR 50; (2006) FLC 93-263; [2006] FamCA 207 per Watts J . See further [205-4045], [205-5020].5 (CTH) Family Law Act 1975 s 75(2)(f) (concluding words). As to other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040]-[205-4075], [205-4085]-[205-4127].6 Ibid s 75(3). See ibid s 4(1) (definition of income tested pension, allowance or benefit); (CTH) Family Law Regulations 1984 reg 12A. See, for example, N v N (1996) 142 FLR 236; (1997) FLC 92-782 . See also social welfare and services [380-4005]-[380-4780]. The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4085] Reasonable standard of living Where the parties have separated or the marriage has been dissolved, the court must take into account, when determining the liability for, and the extent of, a proper award of maintenance, a standard of living that is reasonable in all the circumstances.1 This involves a comparison with the standard of living during the marriage. 2 While the applicant is certainly not limited to seeking maintenance at subsistence level,3 the applicant is not necessarily entitled to a standard of living that is the same as that previously enjoyed4 and often a mutual reduction in standard of living may be expected. 5 However, in some situations the applicant may be entitled to an increased standard of living.6 Where possible, the

parties in their future private lives should independently have a similar standard of living.7 Notes 1 (CTH) Family Law Act 1975 s 75(2)(g). As to other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040]-[205-4080], [205-4090]-[2054127].2 In the Marriage of Aroney (1979) 5 Fam LR 535 at 545 per Nygh J; In the Marriage of Woolley (1981) 6 Fam LR 577 at 586; 48 FLR 328 per Nygh J, Fam C of A. See also McKinnon v McKinnon (2005) FLC 93-242; [2005] FamCA 1245 per Coleman J; In the Marriage of Wilkson (2005) 33 Fam LR 373; (2005) FLC 93-222; [2005] FamCA 430 , Full Court; M v M (2006) 36 Fam LR 97; (2006) FLC 93-283; [2006] FamCA 868 , Full Court; Brown v Brown (2007) 37 Fam LR 59; (2007) FLC 93-316; [2007] FamCA 151 , Full Court; In the Marriage of Milankov (2002) 28 Fam LR 514; (2002) FLC 93-095; [2002] FamCA 195 , Full Court.3 In the Marriage of Evans (1978) 30 FLR 566n at 568; 4 Fam LN No 13 per Goldstein J, Fam C of A; In the Marriage of Patterson (1979) FLC 90-705 at 78,759 per Wood J, Fam C of A; In the Marriage of Bevan (1993) 19 Fam LR 35 at 40, 41; 120 FLR 283; (1995) FLC 92-600 , Fam C of A, Full Court; In the Marriage of Mitchell (1995) 19 Fam LR 44 at 59; 120 FLR 292; (1995) FLC 92-601 , Fam C of A, Full Court. See also C v C (Nullity) (1998) 23 Fam LR 491; 146 FLR 406; (1998) FLC 92-824 at 85,398 , Fam C of A, Full Court (issue is not what might have been the fate of the parties had they never met).4 In the Marriage of Aroney (1979) 5 Fam LR 535 at 545 per Nygh J; In the Marriage of W (1980) 6 Fam LR 538 at 539; (1980) FLC 90-872 per Nygh J, Fam C of A; In the Marriage of Gyopar (1986) FLC 91769 at 75,611, 75,612 per Treyvaud J; In the Marriage of Wilson (1989) 13 Fam LR 205 at 209 per Strauss J, at 210, 211 per Nygh J; (1989) FLC 92-033 , Fam C of A, Full Court; In the Marriage of Bevan (1993) 19 Fam LR 35 at 41, 42; 120 FLR 283; (1995) FLC 92-600 , Fam C of A, Full Court. Compare In the Marriage of Patterson (1979) FLC 90-705 at 78,759 per Wood J.5 In the Marriage of Hope (1977) 3 Fam LN No 61; (1977) FLC 90-294 at 76,560, 76,561 per Marshall J; In the Marriage of Nutting (1978) 30 FLR 555 at 556; (1978) FLC 90-410 per Lindenmayer J; In the Marriage of Antmann (1980) 6 Fam LR 560; (1980) FLC 90-908 at 75,746 , Fam C of A, Full Court.6 See, for example, In the Marriage of Groutsch (1978) 4 Fam LN No 35; (1978) FLC 90-461 at 77,360 per Murray J.7 In the Marriage of Lusby (1977) 30 FLR 180; 3 Fam LN No 85; (1977) FLC 90-311 at 76,655 per Lindenmayer J, Fam C of A, Full Court; In the Marriage of W (1980) 6 Fam LR 538 at 549; (1980) FLC 90-872 per Nygh J; In the Marriage of Antmann (1980) 6 Fam LR 560; (1980) FLC 90-908 at 75,746 , Fam C of A, Full Court. The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4090] Extent to which payment of maintenance would increase applicants earning capacity When deciding the liability for, and the extent of, a proper award of maintenance, the court must consider the extent to which the payment of maintenance to the party whose maintenance is under consideration would increase the earning capacity of that party by enabling that party to undertake a course of education or training, or to establish himself or herself in a business, or otherwise to obtain an adequate income.1 This reflects the notion that, so far as is reasonable, each party should be or should become self-supporting2 and that in proceedings for financial adjustment the court should, as far as practicable, make such orders as will finally determine the financial relationships between the parties and avoid further proceedings between them.3 Notes 1 (CTH) Family Law Act 1975 s 75(2)(h). See, for example, Lang v Lang (1976) 1 Fam LR

11,283 at 11,288 per Connor J, SC(ACT) ((CTH) Family Law Act 1975 s 75(2)(h) not satisfied since course of training would not increase applicants earning capacity; court in this case referred instead to ibid s 75(2)(o)); In the Marriage of Hope (1977) 3 Fam LN No 61; (1977) FLC 90-294 at 76,561; In the Marriage of Bailey (1978) 20 ALR 199; 4 Fam LR 86 at 96; 33 FLR 10 , Fam C of A, Full Court; Ramsey v Ramsey (1978) 4 Fam LN No 20, SC(QLD) (provision for accommodation during course of study); In the Marriage of Whitford (1979) 24 ALR 424; 4 Fam LR 754 at 762; 35 FLR 445; (1979) FLC 90-612 at 78,146 , Fam C of A, Full Court; In the Marriage of Tiley (1980) 6 Fam LR 528 at 534, 535; (1980) FLC 90-898 at 75,661 , Fam C of A, Full Court; In the Marriage of Thomas (1981) FLC 91-018 at 76,202, 76,203 per Gee J (financial provision for motor vehicle to enable party to attend course). Compare In the Marriage of Lyons (1978) FLC 90-459 at 77,339 per Barblett J, Fam C of WA (plans for small business rejected as unrealistic). As to other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040]-[205-4085], [205-4095]-[205-4127].2 (CTH) Family Law Act 1975 s 72. See also [205-4035]. Compare In the Marriage of Astbury (1978) 4 Fam LR 395 at 399; 34 FLR 173; (1978) FLC 90-494 , Fam C of A, Full Court (may be unreasonable to expect spouse with no recent work experience to seek low-paid employment after marriage of long duration). See also In the Marriage of Mitchell (1995) 19 Fam LR 44; 120 FLR 292; (1995) FLC 92-601 at 81,997, 81,998 , Fam C of A, Full Court (relevance of published material on concept of feminisation of poverty) (followed by In the Marriage of Figgins (2002) 29 Fam LR 544; 173 FLR 273; (2002) FLC 93-122; [2002] FamCA 688 , Full Court; Causero v Causero (2006) FLC 93-299; [2006] FamCA 1290 , Full Court).3 (CTH) Family Law Act 1975 s 81. See also In the Marriage of Matthews (1980) 6 Fam LR 142 at 146; (1980) FLC 90-887 per Nygh J. As to the relevance of (CTH) Family Law Act 1975 s 81 in relation to proceedings for spousal maintenance see In the Marriage of Bevan (1993) 19 Fam LR 35; 120 FLR 283; (1995) FLC 92-600 at 81,982 , Fam C of A, Full Court. See further DJM v JLM (1998) 23 Fam LR 396; (1998) FLC 92-816 at 85,275; [1998] FamCA 97 , Full Court; In the Marriage of Figgins (2002) 29 Fam LR 544; 173 FLR 273; (2002) FLC 93-122 at 89,312; [2002] FamCA 688 , Full Court. The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4095] Contribution by applicant to respondents financial position The court must take into account the extent to which the party whose maintenance is under consideration has contributed to the income, earning capacity, property and financial resources of the other party when determining the liability for, and the extent of, a proper award of maintenance.1 Although spousal maintenance claims, in contrast to applications for property settlement,2 are primarily concerned with matters of future need rather than compensation for past contributions or losses,3 the court will also consider such matters in appropriate spousal maintenance cases.4 However, the applicant must first establish a relevant lack of capacity for self-support.5 Notes 1 (CTH) Family Law Act 1975 s 75(2)(j). As to other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040]-[205-4090], [205-4100]-[2054127].2 Ibid s 79(4)(a)-(c) (the contributions to be taken into account in property settlement proceedings). See [205-5035]. As to the meaning of income, property, financial resources and earning capacity see [205-4050], [205-4055].3 In the Marriage of Beck (No 2) (1983) 48 ALR 470; 8 Fam LR 1017 at 1021; (1983) FLC 91-318 , Fam C of A, Full Court. See also CCD v AGMD (2006) 36 Fam LR 356; 205 FLR 97; (2006) FLC 93-300; [2006] FamCA 1291 , Full Court.4 See, for example, In the Marriage of Tye (No 2) (1976) 2 Fam LR 11,205 at 11,206; (1976) FLC 90-048 , Fam C of A, Full Court; In the Marriage of Ryan (1976) 14 ALR 466; 2

Fam LR 11,510 at 11,521; 27 FLR 327; (1976) FLC 90-144 at 75,708, 75,709 , Fam C of A, Full Court ((CTH) Family Law Act 1975 s 75(2)(j) in relation to property settlement); In the Marriage of Hope (1977) 3 Fam LN No 61; (1977) FLC 90-294 at 76,561 per Marshall J; In the Marriage of Brady (1978) 34 FLR 422; 4 Fam LN No 54; (1978) FLC 90-513 at 77,702 ; In the Marriage of Evans (1978) 30 FLR 566n; 4 Fam LN No 13; In the Marriage of Mitchell (1995) 19 Fam LR 44 at 62, 63; 120 FLR 292; (1995) FLC 92-601 , Fam C of A, Full Court. Compare In the Marriage of Bignold (1978) 5 Fam LR 97 at 102, 103 per Connor J, Fam C of WA (where maintenance claim ultimately dismissed in light of order for property settlement). It is not entirely clear whether domestic contributions can in themselves be relevant for this purpose: In the Marriage of Rowan (1977) 30 FLR 353 at 366, 367; (1977) FLC 90-310 at 76,651 per McCall J, Fam C of WA. Compare In the Marriage of Hope (1977) 3 Fam LN No 61; (1977) FLC 90294 at 76,561 per Marshall J; In the Marriage of Brady (1978) 34 FLR 422; 4 Fam LN No 54; (1978) FLC 90-513 at 77,702 per Bulley J, Fam C of A.5 See, for example, In the Marriage of Rowan (1977) 30 FLR 353; (1977) FLC 90-310 at 76,651 per McCall J, Fam C of WA. The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4100] Duration of marriage and effect on applicants earning capacity Also relevant in the assessment of spousal maintenance is the duration of the marriage and the extent to which it has affected the earning capacity of the party whose maintenance is under question.1 It is generally considered to be the effect of the duration of the marriage, rather than the occurrence of the marriage itself, which is significant.2 Thus, the provision does not of itself allow compensation for lost expectations occurring as a result of the marriage.3 For this purpose, the term earning capacity extends beyond current income from personal exertions and skills, and includes the capacity to generate income from personal abilities as well as from property or other assets.4 Notes 1 (CTH) Family Law Act 1975 s 75(2)(k). See also In the Marriage of Mitchell (1995) 19 Fam LR 44 at 62, 63; 120 FLR 292; (1995) FLC 92-601 , Fam C of A, Full Court.2 In the Marriage of Beck (1982) 8 Fam LR 340 at 344; (1982) FLC 91-235 per Gibson J; In the Marriage of Hirst and Rosen (1982) 8 Fam LR 251 at 252; (1982) FLC 91-230 . Compare In the Marriage of Beck (No 2) (1983) 48 ALR 470; 8 Fam LR 1017 at 1019; (1983) FLC 91-318 , Fam C of A, Full Court. A different view was expressed in the early decision of In the Marriage of Petterd (1976) 11 ALR 182; 1 Fam LR 11,496 at 11,499, 11,500; 25 FLR 439 . See also In the Marriage of Hope (1977) 3 Fam LN No 61; (1977) FLC 90-294 at 76,561 per Marshall J. As to other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040]-[205-4095], [205-4105]-[205-4127]. Also see T v T (Pension Splitting) (2006) 35 Fam LR 181; 198 FLR 50; (2006) FLC 93-263; [2006] FamCA 207 per Watts J ; Brown v Brown (2007) 37 Fam LR 59; (2007) FLC 93-316; [2007] FamCA 151 , Full Court.3 In the Marriage of Beck (No 2) (1983) 48 ALR 470; 8 Fam LR 1017 at 1019, 1020; (1983) FLC 91318 , Fam C of A, Full Court. However, the expectations occurring as a result of the marriage may be relevant, for example, in relation to assessing a reasonable standard of living under (CTH) Family Law Act 1975s 75(2)(g), 75(2)(o): In the Marriage of Hirst and Rosen (1982) 8 Fam LR 251 at 253; (1982) FLC 91-230 , Fam C of A; In the Marriage of Beck (No 2) (1983) 48 ALR 470; 8 Fam LR 1017 at 1021, 1022; (1983) FLC 91-318 , Fam C of A, Full Court. See also In the Marriage of Milankov (2002) 28 Fam LR 514; (2002) FLC 93-095; [2002] FamCA 195 , Full Court.4 In the Marriage of Beck (No 2) (1983) 48 ALR 470; 8 Fam LR 1017 at 1019; (1983) FLC 91-318 , Fam C of A, Full Court. The paragraph below is current to 23 July 2010

To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4105] Party who wishes to continue in role of parent The court must take into account the need to protect a party who wishes to continue his or her role as a parent when determining the liability for, and the extent of, a proper award of maintenance.1 In deciding how much weight to accord to this factor, the court must have regard to all other relevant considerations specified in the (CTH) Family Law Act 1975.2 Notes 1 (CTH) Family Law Act 1975 s 75(2)(l). The paragraph previously referred to the need to protect the position of a woman who wishes only to continue her role as a wife and mother. As to the interpretation of the original provision see Barker v Barker (1976) 13 ALR 123; 2 Fam LR 11,453 at 11,461 , SC(TAS); In the Marriage of McHarg (1980) FLC 90-811 at 75,117 per Tonge J; In the Marriage of Woolley (1981) 6 Fam LR 577 at 584; 48 FLR 328 . See also In the Marriage of Hope (1977) 3 Fam LN No 61; (1977) FLC 90-294 at 76,561 per Marshall J; In the Marriage of Patterson (1979) FLC 90-705 at 78,757 per Wood J; In the Marriage of Heeks (1980) FLC 90804 at 75,072, Fam C of A, Full Court; In the Marriage of Rouse (1981) 7 Fam LR 780 at 785; (1981) FLC 91-073 at 76,537 per Simpson SJ (not considered an unreasonable attitude for the wife to delay seeking employment until her daughter started school. Once she sought employment, her role as a parent would be likely to prevent her from obtaining the more remunerative employment as a buyer which she had previously done); In the Marriage of Nixon (1992) FLC 92-308 at 79,317 per Mullane J (a parent with the option of paid work and childcare may instead choose to adopt the role of a full time parent). As to other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040]-[2054100], [205-4110]-[205-4127].2 (CTH) Family Law Act 1975 ss 72, 74, 75. See also In the Marriage of Heeks (1980) FLC 90-804 at 75,072, Fam C of A, Full Court. The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4110] Financial circumstances of either party cohabiting with another person If either party is cohabiting with another person, the financial circumstances relating to the cohabitation1 must be considered by the court in determining the liability for, and the extent of, a proper award of maintenance.2 The court is not limited to consideration of the actual financial arrangements in existence, but may also consider the financial position that would be appropriate in the circumstances.3 Notes 1 It is a question of fact whether the domestic arrangement amounts to cohabitation. See, for example, In the Marriage of Grabar (1976) 2 Fam LR 11,581 at 11,586-8; 27 FLR 196; (1976) FLC 90-147 ; In the Marriage of Woolley (1981) 6 Fam LR 577 at 585; 48 FLR 328 ; In the Marriage of F (1982) 8 Fam LR 29 at 32, 33; (1982) FLC 91-214 . See also In the Marriage of Gwatkin (1978) 4 Fam LR 287 at 289-91 , Fam C of A, Full Court. For the meaning of cohabitation see In the Marriage of Grabar (1976) 2 Fam LR 11,581 at 11,587; 27 FLR 196; (1976) FLC 90-147 per Asche J; Roberts v Roberts (1977) 3 Fam LN No 59, SC(WA). There is as yet no authority as to whether cohabitation extends beyond de facto relationships.2 (CTH) Family Law Act 1975 s 75(2)(m). Previously, the paragraph only referred to the applicants circumstances of cohabitation, although in practice, details of the respondents cohabitation

could also be considered under other paragraphs, such as ibid s 75(2)(b), 75(2)(e), 75(2)(o). See, for example, In the Marriage of Soblusky (1976) 12 ALR 699; 2 Fam LR 11,528; 28 FLR 81; (1976) FLC 90-124 , Fam C of A, Full Court; In the Marriage of Patterson (1979) FLC 90-705 at 78,757 per Wood J. As to other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040]-[205-4105], [205-4115]-[205-4127].3 In the Marriage of F (1982) 8 Fam LR 29 at 33; (1982) FLC 91-214 per Fogarty J; In the Marriage of Patterson (1979) FLC 90-705 at 78,757-9 per Wood J. Compare In the Marriage of Hart (1980) 5 Fam LR 844 at 850 per Lindenmayer J. The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4115] Terms of any property order The court will have regard to the terms of any order made, or proposed to be made, under section 79 of the (CTH) Family Law Act 1975 in relation to the property of the parties when determining the liability for, and the extent of, a proper award of maintenance.1 For example, a substantial property order may make an order for spousal maintenance unnecessary,2 or may affect the amount or form of any maintenance order. 3 Notes 1 (CTH) Family Law Act 1975 s 75(2)(n). As to the correct procedure where the court has before it claims for both property settlement and spousal maintenance see In the Marriage of Anast and Anastopoulos (1981) 7 Fam LR 728 at 733; (1982) FLC 91-201 , Fam C of A, Full Court; In the Marriage of Morris (1982) 8 Fam LR 740 at 753; (1982) FLC 91-271 per Ellis SJ and Gee J, Fam C of A, Full Court; In the Marriage of Little (1990) 14 Fam LR 118 at 123; 100 FLR 322; (1990) FLC 92-147 , Fam C of A, Full Court; In the Marriage of Clauson (1995) 18 Fam LR 693 at 705; (1995) FLC 92-595 , Fam C of A, Full Court; In the Marriage of Bevan (1993) 19 Fam LR 35 at 39; 120 FLR 283; (1995) FLC 92-600 per Nicholson CJ, Lindenmayer and McGovern JJ , Fam C of A, Full Court. Compare In the Marriage of Kauiers (1986) 11 Fam LR 41 at 58, 59; (1986) FLC 91-708 , Fam C of A, Full Court; In the Marriage of Elsey (1996) 21 Fam LR 249; (1997) FLC 92-727, Fam C of A, Full Court (the result at trial was not just and equitable, as the trial judge did not consider the effect of the orders on the husband's earning capacity. He would be unable to borrow a further $95,000 to pay the wife and continue to operate the business from the home. If the home was sold, he would be paying a commercial rent for business premises); In the Marriage of Cunningham (2005) 33 Fam LR 159; (2005) FLC 93212; [2005] FamCA 159, Full Court (a reduction of the trial judges adjustment under (CTH) Family Law Act 1975 s 75(2) in favour of the wife, because the asset distribution ordered by the trial judge made capital immediately available to the wife which could be used to reduce the disparity in the parties incomes). As to property claims see [205-5005]. As to other factors to be taken into account by the court when determining a proper award of maintenance see [2054040]-[205-4110], [205-4120]-[205-4127].2 See, for example, In the Marriage of Bignold (1978) 5 Fam LR 97 at 104 per Connor J, Fam C of WA; In the Marriage of W (1980) 6 Fam LR 538 at 550; (1980) FLC 90-872 per Nygh J . See also Re Q (1994) 18 Fam LR 442 at 446 per Kay J ; In the Marriage of Rosati (1998) 23 Fam LR 288; (1998) FLC 92-804 at 85,048-051; [1998] FamCA 38 , Full Court; In the Marriage of Figgins (2002) 29 Fam LR 544; 173 FLR 273; (2002) FLC 93-122; [2002] FamCA 688 , Fam C of A, Full Court. See also In the Marriage of Dickson (1999) 24 Fam LR 460; (1999) FLC 92-843; [1999] FamCA 278, Full Court .3 See, for example, In the Marriage of Little (1990) 14 Fam LR 118 at 123, 124; 100 FLR 322; (1990) FLC 92-147 , Fam C of A, Full Court. See also In the Marriage of Caska (2001) 28 Fam LR 307; 166 FLR 196; (2002) FLC 93-092; [2001] FamCA 1279, Full Court . The paragraph below is current to 23 July 2010

To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4117] Terms of any orders or declarations made in relation to defacto relationships The court must have regard to the terms of any order or declaration made, or proposed to be made, in relation to a person who is a party to a defacto relationship, or a party to a marriage, the property of such persons or vested bankruptcy property of such persons.1 The court must also take into account orders and declarations made, or proposed to be made, under the (CTH) Family Law Act 1975 in relation to property interests between a married couple when one of the parties to the marriage is also a party to a defacto relationship property dispute.2 Notes 1 (CTH) Family Law Act 1975 s 75(2)(naa). See also In the Marriage of Bevan (1993) 19 Fam LR 35; 120 FLR 283; (1995) FLC 92-600 at [81979] per the Court .2 (CTH) Family Law Act 1975 s 90SF(3)(o). The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4120] Child support for child of marriage In deciding on an application for maintenance the court must take into account any child support under the (CTH) Child Support (Assessment) Act 1989 that a party to the marriage has provided, or is to provide, for a child of a marriage.1 Notes 1 (CTH) Family Law Act 1975 s 75(2)(na). See also In the Marriage of Clauson (1995) 18 Fam LR 693 at 710, 711; (1995) FLC 92-595 , Fam C of A, Full Court (in context of a property order); OSF v OJK (2004) 179 FLR 222; (2004) FLC 93-191; [2004] FMCAfam 63 per Walters FM . As to the child support scheme generally see [205-4290], [205-4295]. As to other factors to be taken into account by the court when determining a proper award of maintenance see [2054040]-[205-4115], [205-4125], [205-4127]. The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4125] Fact or circumstance relevant to justice of case When determining the liability for, and the extent of, a proper award of maintenance the court must take into account any fact or circumstance that, in the opinion of the court, the justice of the case requires.1 It has been held that this does not include facts or circumstances relating to the marital history of the parties but only facts and circumstances of a broadly financial nature.2 This provision is generally intended to refer to relevant financial matters not covered in the preceding paragraphs of section 75(2) of the (CTH) Family Law Act 1975.3 Allegations about the behaviour or conduct of the parties must not normally be admitted,4 except where the conduct has had specific financial consequences.5 This may occur where a party has manipulated, damaged or destroyed assets,6 or acted so as to weaken unreasonably his or her own financial position.7 The effects of domestic violence may

also be relevant in some circumstances.8 Notes 1 (CTH) Family Law Act 1975 s 75(2)(o). For discussion of the other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040]-[2054120], [205-4127].2 In the Marriage of Soblusky (1976) 12 ALR 699; 2 Fam LR 11,528 at 11,550; 28 FLR 81; (1976) FLC 90-124 , Fam C of A, Full Court; In the Marriage of Ferguson (1978) 4 Fam LR 312 at 318, 319 per Strauss J, at 328-30 per Watson and Wood SJJ; 34 FLR 342; (1978) FLC 90-500 , Fam C of A, Full Court; In the Marriage of Fisher (1990) 13 Fam LR 806 , Fam C of A, Full Court. Compare In the Marriage of Doherty (1995) 20 Fam LR 137 , Fam C of A, Full Court. See, for example, In the Marriage of Ferguson (1978) 4 Fam LR 312 at 324; 34 FLR 342; (1978) FLC 90-500 per Strauss J, Fam C of A, Full Court (benefits received by husband from his family); In the Marriage of Beck (No 2) (1983) 48 ALR 470; 8 Fam LR 1017 at 1021; (1983) FLC 91-318 , Fam C of A, Full Court (wifes life interest in property lost on marriage). As to whether a spouses prospects of remarriage should be considered under (CTH) Family Law Act 1975 s 75(2)(o) see In the Marriage of Steinmetz (1980) 6 Fam LR 554 at 556 per Evatt CJ, Fam C of A, Full Court; In the Marriage of Woolley (1981) 6 Fam LR 577 at 585, 586; 48 FLR 328 per Nygh J , Fam C of A; In the Marriage of Rouse (No 2) (1981) 7 Fam LN No 22; (1982) FLC 91-226 at 77,224 per Evatt CJ, Fam C of A, Full Court. For a discussion of the issue, raising the possibility of conduct such as domestic violence having a wider relevance in financial proceedings, see Kennon v Kennon (1997) 22 Fam LR 1; 139 FLR 118; (1997) FLC 92-757 , Fam C of A, Full Court.3 In the Marriage of Beck (No 2) (1983) 48 ALR 470; 8 Fam LR 1017 at 1021; (1983) FLC 91-318 , Fam C of A, Full Court. See, for example, Lang v Lang (1976) 1 Fam LR 11,283 at 11,288 per Connor J , SC(ACT) (wifes desire to obtain particular form of employment); In the Marriage of Grabar (1976) 2 Fam LR 11,581 at 11,588; 27 FLR 196; (1976) FLC 90-147 per Asche J; Olliver v Olliver (1978) 4 Fam LR 360 at 367; 32 FLR 129; (1978) FLC 90-499 , Fam C of A, Full Court (contributions of parties prior to marriage); In the Marriage of Aroney (1979) 5 Fam LR 535 at 540, 541 per Nygh J (suspicion that the party had not fully disclosed assets); Gollings v Scott (2007) 37 Fam LR 428; (2007) FLC 93-319; [2007] FamCA 397, Full Court (the manner in which the money spent by the husband in furtherance of his relationship with his girlfriend).4 In the Marriage of Soblusky (1976) 12 ALR 699; 2 Fam LR 11,528 at 11,550; 28 FLR 81; (1976) FLC 90-124 , Fam C of A, Full Court; In the Marriage of Hack (1977) 6 Fam LR 425 at 427; (1980) FLC 90-886 per Bell J ; In the Marriage of Fisher (1990) 13 Fam LR 806 . See, however, discussion of the relevance of matters such as domestic violence in financial proceedings in Kennon v Kennon (1997) 22 Fam LR 1; 139 FLR 118; (1997) FLC 92-757 , Fam C of A, Full Court; In the Marriage of X (1999) 26 Fam LR 51; (2000) FLC 93-017; [1999] FamCA 2254, Full Court (the husband was responsible for the wife contracting genital herpes and that the wifes condition was relevant to the question of an adjustment pursuant to (CTH) Family Law Act 1975 s 75(2)(o)); AP v ENP (P and P) (2003) FLC 93-161; [2002] FMCAfam 164 per Walters FM (the court to have regard to the wifes psychiatric, psychological and emotional health and the likely impact upon her of any order that would have the effect of her losing the ability to reside in the former matrimonial home).5 In the Marriage of Ferguson (1978) 4 Fam LR 312 at 319 per Strauss J, at 329 per Watson and Wood SJJ; 34 FLR 342; (1978) FLC 90-500 , Fam C of A, Full Court; In the Marriage of Hack (1977) 6 Fam LR 425 at 427; (1980) FLC 90-886 per Bell J . See also Barkley v Barkley (1976) 11 ALR 403; 1 Fam LR 11,554 at 11,588, 11,589; 25 FLR 405; (1977) FLC 90-216 per Carmichael J , SC(NSW). See also In the Marriage of Jordan (1996) 21 Fam LR 382; (1997) FLC 92-736 per Chisholm J (misrepresentation); In the Marriage of Figgins (2002) 29 Fam LR 544; 173 FLR 273; (2002) FLC 93-122; [2002] FamCA 688, Full Court (husbands inheritance); Causero v Causero (2006) FLC 93-299; [2006] FamCA 1290 , Full Court (the justice of the case requires the court to take into account that the husband is likely to receive amended income tax assessments and be liable to pay additional tax and penalties); Gould v Gould (2007) FLC 93-333; [2007] FamCA 609, Full Court (husbands financial nondisclosure). See, however, the discussion of the relevance of matters such as domestic violence in financial proceedings in Kennon v Kennon (1997) 22 Fam LR 1; 139 FLR 118; (1997) FLC

92-757 , Fam C of A, Full Court; AP v ENP (P and P) (2003) FLC 93-161; [2002] FMCAfam 164 per Walters FM ; Steven v Stevens (2005) FLC 93-246; [2005] FamCA 1304, Full Court ; In the Marriage of Hill (2005) 32 Fam LR 552; (2005) FLC 93-209; [2005] FamCA 42, Full Court .6 In the Marriage of Cordell (1977) 3 Fam LR 11,588 at 11,593; 30 FLR 308; (1977) FLC 90-322 per Wood J; In the Marriage of Tuck (1979) 7 Fam LR 492 at 500, 501 per Evatt CJ and Murray J, at 509 per Strauss J; (1981) FLC 91-021 , Fam C of A, Full Court; In the Marriage of Kowaliw (1981) 7 Fam LN No 13; (1981) FLC 91-092 at 76,644, 76,645 per Baker J; Z v Z (2005) 34 Fam LR 296; (2005) FLC 93-241; [2005] FamCA 996, Full Court ; In the Marriage of Milankov (2002) 28 Fam LR 514; (2002) FLC 93-095; [2002] FamCA 195 .7 In the Marriage of Patterson (1979) FLC 90-705 at 78,757 per Wood J; In the Marriage of F (1982) 8 Fam LR 29 at 33; (1982) FLC 91-214 per Fogarty J; In the Marriage of Berta (1988) 12 Fam LR 191 at 197; (1988) FLC 91-916 , Fam C of A, Full Court; In the Marriage of Antmann (1980) 6 Fam LR 560; (1980) FLC 90-908 ; Crampton v Crampton (2006) FLC 93269; [2006] FamCA 528, Full Court ; NHC v RCH (2004) 32 Fam LR 518; 186 FLR 240 ; (2004) FLC 93-204; [2004] FamCA 633, Full Court ; Kirby v Kirby (2004) 32 Fam LR 321; (2004) FLC 93-188; [2004] FamCA 387, Full Court (husbands debt position arose because of his failure to file his tax returns on time).8 Kennon v Kennon (1997) 22 Fam LR 1; 139 FLR 118; (1997) FLC 92-757 , Fam C of A, Full Court. See also C v C (Nullity) (1998) 23 Fam LR 491; 146 FLR 406; (1998) FLC 92-824 at [135]-[138] , Fam C of A, Full Court; In the Marriage of Rosati (1998) 23 Fam LR 288; (1998) FLC 92-804; [1998] FamCA 38 , Full Court; AP v ENP (P and P) (2003) FLC 93-161; [2002] FMCAfam 164 per Walters FM ; Steven v Stevens (2005) FLC 93-246; [2005] FamCA 1304, Full Court ; In the Marriage of Hill (2005) 32 Fam LR 552; (2005) FLC 93-209; [2005] FamCA 42, Full Court . The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4127] Terms of binding financial agreement When determining whether to make an order for spousal maintenance, the court must take into account the terms of the financial agreement are complied with1 that are binding2 on the parties.3 A financial agreement is binding if: (1) the agreement is signed by all parties; 4 (2) before signing the agreement, a party was provided with independent legal advice from a legal practitioner about the effect of the agreement on the rights of that party and about the advantages and disadvantages, at the time that the advice was provided, to that party of making the agreement;5 (3) either before or after signing the agreement, a party was provided with a signed statement by the legal practitioner stating that the advice was provided to that party (whether or not the statement is annexed to the agreement) and a copy of the statement that was provided to a party is given to the other spouse party or to a legal practitioner for the other spouse party;6 and (4)

that the agreement has not been terminated and has not been set aside by a court.7 Consequently, a financial agreement is binding if one party receives an originally signed document and another receives a copy of that signed document, one being clearly marked original and the other clearly marked copy. 8 Accordingly, a financial agreement is not binding, if it contains different terms.9 Nor can estoppel be raised.10 Where the statutory conditions for a binding financial agreement are not met, the court is not precluded from making maintenance orders.11 Notes 1 As to financial agreements generally under (CTH) Family Law Act 1975 Pt VIIIA see [205-3540][205-3585]. For the definition of financial agreement see [205-3520]. Note also ibid s 71A.2 As to the requirements for a binding financial agreement see ibid s 90G and [205-3540]. In relation specifically to clauses in a financial agreement dealing with spousal maintenance see ibid ss 90E-90F and [205-3680].3 Ibid s 75(2)(p). As to other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040]-[205-4127].4 Ibid s 90G(1)(a). See also Fevia v Carmel-Fevia (2009) 42 Fam LR 50; (2009) FLC 93-411 at [304][321]; [2009] FamCA 816; BC200950719 per Murphy J.5 (CTH) Family Law Act 1975 s 90G(1)(b).6 Ibid s 90G(1)(c).7 Ibid s 90G(1)(d).8 Fevia v Carmel-Fevia (2009) 42 Fam LR 50; (2009) FLC 93-411 at [312]; [2009] FamCA 816; BC200950719 per Murphy J.9 Fevia v Carmel-Fevia (2009) 42 Fam LR 50; (2009) FLC 93-411 at [313]; [2009] FamCA 816; BC200950719 per Murphy J.10 Fevia v Carmel-Fevia (2009) 42 Fam LR 50; (2009) FLC 93411 at [295]-[303]; [2009] FamCA 816; BC200950719 per Murphy J.11 (CTH) Family Law Act 1975 s 71A precludes the court from making maintenance orders where there is a binding financial agreement. However, where the statutory conditions for a binding agreement are not met the court is not prevented from making orders under ibid Pt VIII: Fevia v Carmel-Fevia (2009) 42 Fam LR 50; (2009) FLC 93-411; [2009] FamCA 816; BC200950719 at [306], [307] , per Murphy J. As to other factors to be taken into account by the court when determining a proper award of maintenance see [205-4040]-[205-4125]. The paragraph below is current to 23 July 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [205-4128] Terms of binding financial agreements in relation to defacto relationships The court must have regard to the terms of any financial agreements relating to defacto relationships that is binding on a party to a marriage.1 Further, when dealing with the alteration of property interests between a defacto couple, the court must take into account the terms of any binding financial agreements that one of the defacto partners have with a current or former marriage partner.2 Notes 1 (CTH) Family Law Act 1975 s 75(2)(q).2 Ibid s 90SF(3)(s). See also Jonas v May [2010] FamCa 551; BC201050633 at [61], [66], where the Court made reference to the likelihood of a future final property division as a factor in making a maintenance order arising from a de facto relationship.

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Bottom of Form (6) RELATIONSHIPS WITH CLIENTS The paragraph below is current to 28 August 2002 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [250-450] Formation of relationship of lawyer and client In most cases1 the relationship between a lawyer and a client is established by a contract of retainer which is a contract between the lawyer and the client under which the client employs the lawyer to undertake certain work for the client and the lawyer agrees to carry out that work.2 The principles applicable to such contracts are those which apply to contracts generally except to the extent that questions of public policy may intrude.3 Unless there are express requirements to the contrary,4 a retainer is not required to be in writing.5 In accordance with the ordinary law of principal and agent6 a client may become a party to a contract of retainer with a lawyer where another person passes instructions to the lawyer on behalf of the client with the clients knowledge and assent.7 Where a lawyer starts an action without the clients authority, it is open to the client to ratify the act of the lawyer who started the action, to adopt the proceedings approving past action and to authorise the lawyer to continue the action.8

The conduct of a lawyer and a client may establish that the relationship of lawyer and client does in fact exist even though there is no express retainer.9 Notes 1 These do not include some relationships between persons practising exclusively as barristers and their clients. As to the establishment of the relationship between barristers and their clients see [250-455]. As to the meaning of retainer in regard to barristers see [250-460]. In certain cases a non-contractual relationship might constitute a retainer: see note 9 below.2 As to the extent and duration of retainers see [250-465].3 Cachia v Isaacs (1985) 3 NSWLR 366 at 368, 377 . The general principles applying to contracts include those relating to any incapacity of a person to enter a contract or any limitation of a persons capacity to enter a contract, as well as those in respect of minors and persons suffering from mental disability. As to the special situation of an infant engaging a Legal Aid duty solicitor in proceedings in relation to child neglect see J v Lieschke (1987) 162 CLR 447 at 451-2; 69 ALR 647; 61 ALJR 143; 11 Fam LR 417 per Wilson J.4 For example, in New South Wales, a barrister or solicitor is required to make a disclosure in writing in respect of certain matters relating to the costs of legal services to be undertaken by the barrister or solicitor for the client before the barrister or solicitor is retained to provide the legal services concerned, except as otherwise provided: (NSW) Legal Profession Act 1987 Pt 11 Divs 1, 2. As to costs agreements see ibid Pt 11 Div 3. Disclosure to a client is not required to be made by a barrister or solicitor who is retained on behalf of the client by another barrister or solicitor but the disclosure to the client is required to include the costs of the barrister or solicitor so retained: ibid s 175(3). In Queensland, the Guide to Professional Conduct compiled by the Queensland Law Society Incorporated published as the Solicitors Handbook provides in para 5.01(2) that oral instructions received from a client should be committed to writing and a copy promptly forwarded to the client. In Victoria, before being retained, or as soon as practicable after being retained, a legal practitioner or firm must give a prospective client or client a statement setting out specified information. This includes detailing costing of the legal services and providing to the client a statement advising of the clients right to negotiate a costs agreement and receive bills of costs. A statement is not required to be given in certain circumstances including if the costs are not likely to exceed a particular threshold amount or the client is a public company, a subsidiary of a public company, a foreign company, a registered Australian body within the meaning of the (CTH) Corporations Act 2001 or certain government clients: (VIC) Legal Practice Act 1996 ss 86, 90. Where the contract constituting the retainer contains an additional provision in respect of which there is a legislative requirement that it be evidenced in writing, the contract itself must be in writing: Tomlinson v Gell (1837) 6 Ad & El 564; 112 ER 216 . See also Geraghty v Permanent Trustee Co Ltd (1986) 4 NSWLR 412 (solicitors general retainer whereby a fee was paid for the availability of the solicitor to act for the client and to provide normal advice without charge, with other professional services to be charged for, was held not to constitute remuneration for other business within the meaning of a provision requiring certain agreements to be in writing). 5 It is merely advisable for a retainer to be in writing: Owen v Ord (1828) 3 C & P 349; 172 ER 451 . Where there is a dispute in relation to the existence or extent of a retainer, a lawyer on whom the onus of proof lies will fail where there is merely assertion against assertion unless additional circumstances are present, including oral examination or cross examination of the solicitor or client or both: Murphy v Liesfield [1930] VLR 142 ; Re OSullivan; Wilson v Bedford [1937] St R Qd 50 ; Crossley v Crowther (1851) 9 Hare 384; 68 ER 556. Such circumstances may also include a consideration of the presumed knowledge of the lawyer as to the importance of certainty in his or her relations with clients and the advantage in which he or she stands by reason of his or her professional knowledge: Murphy v Liesfield [1930] VLR 142 at 146-8 . See also Griffiths v Evans [1953] 2 All ER 1364 at 1369; [1953] 1 WLR 1424 per Denning LJ (more weight to be given to the clients word than to that of the solicitor); A W & L M Forrest Pty Ltd v Beamish (1998) 146 FLR 450 at 460; BC9804350 ; Meerkin & Apel v Rossett Pty Ltd [1998] 4

VR 54 at 66 per Charles JA (Callaway and Balt JJA agreeing); Re Paine (1912) 28 TLR 201 .6 As to the law of principal and agent generally see agency.7 Omega Estates Pty Ltd v Ganke [1963] NSWR 1416 at 1426; (1962) 80 WN (NSW) 1218 ; Chartspike Pty Ltd (in liq) v Chahoud BC200006418; [2000] NSWSC 625 Danish Mercantile Co Ltd v Beaumont [1951] Ch 680; [1951] 1 All ER 925 ; Gavaghan v Edwards [1961] 2 QB 220 ; Hudgson v Endrust (Aust) Pty Ltd (1986) 11 FCR 152 ; Davies v Taylor (No 2) [1974] AC 225 ; Adams v London Improved Motor Coach Builders Ltd [1921] 1 KB 495; [1920] All ER Rep 340 .8 Danish Mercantile Co Ltd v Beaumont [1951] Ch 680; [1951] 1 All ER 925 ; Reynolds v Howell (1873) LR 8 QB 398; Omega Estates Pty Ltd v Ganke [1963] NSWR 1416 at 1426; (1962) 80 WN (NSW) 1218 ; Chartspike Pty Ltd (in liq) v Chahoud BC200006418; [2000] NSWSC 625 . The relationship of lawyer and client will not arise where an unauthorised person has instructed the lawyer on behalf of the client and the client has not adopted, ratified or recognised the lawyer or his or her services in conducting an action on behalf of the client: Re Becket; Purnell v Paine [1918] 2 Ch 72 .9 As to non-contractual lawyer and client relationships see MacPherson v Kevin J Prunty & Associates [1983] 1 VR 573 at 574-80 ; Blyth v Fladgate [1891] 1 Ch 337 at 355 . Compare Groom v Crocker [1939] 1 KB 194 at 222; [1938] 2 All ER 394; (1938) 158 LT 477 (referring to a presumed retainer). A professional engagement may be implied or inferred: Meerkin & Apel v Rossett Pty Ltd [1998] 4 VR 54 . See also Donaldson v Haldane (1840) 7 Cl & Fin 762 at 7712; 7 ER 1258 at 1262 ( solicitor volunteering services). As to the nature of the relationship between lawyer and client see further [250-480]. The paragraph below is current to 28 August 2002 To update legislation see ACL Legislation [250-455] Relationship of barrister and client In all jurisdictions except Queensland and Tasmania, persons are admitted to practise as members of a single undivided profession1 and as such are not restricted in their capacity to contract with clients and sue for fees.2 However, in all jurisdictions, there are separate groups of persons practising solely as barristers3 although only barristers in Queensland are unable to enter into express or implied contracts with a client or the barristers solicitor or to sue for fees.4 In Queensland, the relationship between a barrister and client is based upon the barristers acceptance of a brief.5 Notes 1 See [250-1] notes 5 and 6. As to admission to practise in Queensland see [250-1] note 10. In Tasmania, while there is provision for separate admission as a barrister, this relates only to persons who have previously been admitted as a barrister in a jurisdiction other than Tasmania: (TAS) Legal Profession Act 1993 s 28.2 R v Doutre (1884) LR 9 App Cas 745 at 751-2.3 See [250-10].4 The original separate bar in the colony of New South Wales, and then also the colonies of Queensland and Victoria, adopted the customs and usages of the English bar which, under the common law of England, prohibited barristers to enter into express or implied contracts with a client or the barristers solicitor or to sue for fees. As to the maintenance of the rules in relation to incapacity to contract with a client and inability to sue for fees upon separation of the colonies of Queensland and Victoria from the colony of New South Wales see Levy v Union Bank of Australia Ltd (1896) 21 VLR 683 ; Giannarelli v Wraith (1988) 165 CLR 543 at 587, 602 (compare at 590); 81 ALR 417; 62 ALJR 611; 35 A Crim R 1 . See also Manson v President of the Shire of Maffra (1881) 7 VLR (L) 364 at 376 ; Re Melbourne Parking Station Ltd (in liq) [1929] VLR 5 at 9; [1928] ALR 398 . As to a barristers incapacity under English common law to contract with a client or the barristers solicitor see Kennedy v Broun (1863) 13 CBNS 677 at 727, 736; 143 ER 268 at 287, 291 ; Rondel v Worsley [1969] 1 AC 191 at 278, 287; [1967] 3 All ER 993 ; Giannarelli v Wraith (1988) 165 CLR 543 at 565, 587, 593; 81 ALR 417; 62 ALJR 611; 35 A Crim R 1 . As to a barristers inability under English common law to sue for fees see Kennedy v Broun (1863) 13 CBNS 677; 143 ER 268 ; Mostyn v Mostyn (1870) LR 5 Ch App 457 (counsel has only a moral claim for fees whether the business was litigious or not); Re Le Brasseur and Oakley [1896] 2 Ch 487 (if counsel does not choose to insist on payment of his or her fees with the

brief, the payment becomes a matter of honour only, not legal obligation); Re Sandiford (No 2); Italo-Canadian Corp Ltd v Sandiford [1935] Ch 681 ; Wells v Wells [1914] P 157 at 162-3 ; Giannarelli v Wraith (1988) 165 CLR 543 at 555, 565, 592, 600; 81 ALR 417; 62 ALJR 611; 35 A Crim R 1 ; Rondel v Worsley [1969] 1 AC 191 at 236, 278, 279, 287; [1967] 3 All ER 993 ; Dimos v Hanos (t/as Leo Dimos & Associates) BC200102765; [2001] VSC 173 . See further Levy v Union Bank of Australia Ltd (1896) 21 VLR 683 at 685 ; Re Melbourne Parking Station Ltd (in liq) [1929] VLR 5 at 9; [1928] ALR 398 ; Giannarelli v Wraith (1988) 165 CLR 543 at 587, 602 (compare at 590); 81 ALR 417; 62 ALJR 611; 35 A Crim R 1 . 5 As to acceptance of briefs see [250-460]. The paragraph below is current to 28 August 2002 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [250-460] Acceptance of briefs The members of each of the constituent bodies of the Australian Bar Association1 are subject to obligations under rules of conduct. 2 These include rules in respect of briefs and retainers generally.3 A barrister must accept a brief 4 to appear before a court in a field in which the barrister practises or professes to practice where specified circumstances exist.5 The rules provide for the circumstances in which a barrister must refuse to accept or retain a brief.6 There are further circumstances in which a barrister may decline to accept a brief.7 The rules outline certain restrictions and limitations in respect of the return of a brief.8 There are provisions requiring a barrister to return a brief in particular circumstances.9 In Victoria, the rules provide for the acceptance by a barrister of a retainer, including a general or a special retainer.10 Notes 1 As to the constituent bodies of the Australian Bar Association see [250-25].2 Rules have been adopted by each of the constituent bodies. These are largely based on model rules which were developed as a result of consultations between those bodies within the Australian Bar Association in an attempt to secure uniformity between the rules of the various Bars. While there is considerable uniformity between the individual sets of rules there are some local rules which in individual cases differ from the model rules.3 In addition to rules in relation to briefs and retainers, the various rules each contain provisions relating to advocacy and other rules of conduct.4 A brief is the instructions to counsel to appear in court or to carry out other legal work. It is generally but not necessarily in documentary form and the expression includes reference to the papers and other material relevant to the matter: see Butterworths Australian Legal Dictionary.5 (NSW) New South Wales Barristers Rules r 85 (QLD) Queensland Barristers Rules r 85 (this rule does not contain the expression to appear before a court) (VIC) Victorian Bar Incorporated Practice RulesRules of Conduct r 86 (includes also to advise or to draw pleadings or any other document) (WA) Western Australian Bar Association (Inc) Conduct Rules r 77. The specified circumstances are: (1) the brief is within the barristers capacity, skill and experience;

(2) the barrister would be available to work as a barrister when the brief would require the barrister to appear or to prepare, and the barrister is not already committed to other professional or personal engagements which may, as a real possibility, prevent the barrister from being able to advance a clients interests to the best of the barristers skill and diligence; (3) the fee offered on the brief is acceptable to the barrister; and (4) the barrister is not obliged or permitted to refuse the brief under certain other of the rules. A barrister must not set the level of an acceptable fee, for the purposes of the rule, higher than the barrister would otherwise set if the barrister were otherwise willing to accept the brief, with the intent that the solicitor may be deterred from continuing to offer the brief to the barrister. See: (NSW) New South Wales Barristers Rules r 86 (QLD) Queensland Barristers Rules r 86 (VIC) Victorian Bar Incorporated Practice RulesRules of Conduct r 88 (WA) Western Australian Bar Association (Inc) Conduct Rules r 78. These rules are based upon the rule developed at the English Bar and adopted in the separate Australian Bars (see [250-455] note 4) imposing a duty on a barrister to accept any brief offered to him or her at a reasonable fee provided it is in a field in which the barrister ordinarily practises and that barrister is not otherwise committed. The rule is referred to as the cab-rank principle or rule: Giannarelli v Wraith (1988) 165 CLR 543 at 572, 580, 594; 81 ALR 417; 62 ALJR 611; 35 A Crim R 1 . 6 (NSW) New South Wales Barristers Rules rr 87, 89, 101, 102 (QLD) Queensland Barristers Rules rr 87, 89, 101, 102 (VIC) Victorian Bar Incorporated Practice RulesRules of Conduct rr 92-92B, 100 (WA) Western Australian Bar Association (Inc) Conduct Rules rr 79, 81. 7 (NSW) New South Wales Barristers Rules rr 91, 92 (QLD) Queensland Barristers Rules rr 91, 92 (VIC) Victorian Bar Incorporated Practice RulesRules of Conduct rr 96, 97 (WA) Western Australian Bar Association (Inc) Conduct Rules rr 83, 84. 8 (NSW) New South Wales Barristers Rules rr 93-100 (QLD) Queensland Barristers Rules rr 93-100 (VIC) Victorian Bar Incorporated Practice RulesRules of Conduct rr 98, 101-07 (WA) Western Australian Bar Association (Inc) Conduct Rules rr 85-92.

9 (NSW) New South Wales Barristers Rules rr 101, 102 (QLD) Queensland Barristers Rules rr 101, 102 (VIC) Victorian Bar Incorporated Practice RulesRules of Conduct rr 99, 100 (WA) Western Australian Bar Association (Inc) Conduct Rules rr 93, 94. 10 (VIC) Victorian Bar Incorporated Practice RulesRules of Conduct rr 110-12. In this context a retainer refers to a contract between a barrister and client for the provision of legal services. A barrister may accept a retainer only from a solicitor or, in relation to a matter in which a patent attorney can instruct the barrister without the intervention of a solicitor, from a patent attorney. The retainer is the retainer of the lay client. The accepting of a retainer precludes a barrister from appearing in court for an interest adverse to that of the client retaining him or her. Acceptance confers no authority on the barrister and a brief must be delivered in order to authorise the barrister to take any step in a proceeding: ibid r 110. A barrister is not bound to accept a general retainer but once accepted it has the effect of preventing counsel from accepting a brief against the party giving the retainer without first allowing that party an opportunity to instruct him or her. As to general retainers see ibid r 111. A special retainer is the engagement of a barrister for a particular party in particular proceedings, either existing or threatened, and, subject to the provisions of the rules with respect to the acceptance of briefs and to the payment of the fee for the retainer, the special retainer is binding when delivered: ibid r 112. The paragraph below is current to 28 August 2002 For new cases see ACL Reporter [250-465] Extent and duration of retainer The extent of the duties owed by a lawyer to the lawyers client depends on the terms and limits of the retainer.1 A retainer covers all things that are necessary and proper for the conduct of the clients business.2 A lawyers authority under the retainer in relation to a contentious matter does not extend to steps in relation to an appeal after conviction or final judgment.3 When a client has retained a lawyer, the lawyer will prima facie be considered to have contracted to carry out to its conclusion the business for which the lawyer was retained.4 A retainer may be an entire contract,5 whether in respect of contentious or non-contentious business.6 Whether a retainer in respect of the conduct of legal proceedings is an entire contract must be determined by reference to the circumstances of the particular case.7 It is a question of fact whether there are natural breaks in the work done by a lawyer so that each portion of it can and should be treated as a separate and distinct part in itself and charged separately.8 Where a retainer is an entire contract a lawyer may withdraw from the retainer for good cause and upon reasonable notice.9 A term will be implied enabling the client to withdraw the retainer at any time in contentious business or, in non-contentious business, where there is not an entire contract.10 Once an effective retainer has been given, definite, clear and precise action or notice is required to withdraw that retainer.11 Notes 1 Hawkins v Clayton (1988) 164 CLR 539 at 544; 78 ALR 69; 62 ALJR 240 ; Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (a firm) [1979] Ch 384 at 402-3; [1978] 3 All ER 571; [1978] 3 WLR 167 ; Ex parte Maxwell; Re Bill of Costs (1955) 72 WN (NSW) 333 ; Orszulak v Hoy (1989) Aust Torts Reports 80-293; McGee OCallaghan Gill Pty Ltd v Deacons Graham & James (2001) ANZ ConvR 614; BC200104199.2 Ex parte Maxwell; Re Bill of Costs (1955) 72 WN (NSW) 333 at 336 per Roper J; Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (a firm) [1979] Ch 384; [1978] 3 All ER 571; [1978] 3 WLR 167 . As to a lawyers authority generally see

[250-470].3 City of Glenorchy v Addison (No 2) (1967) 15 LGRA 259 ; Pengilly v Pengilly [1926] SASR 344 ; Picken v President of the Shire of Mount Alexander (1890) 16 VLR 309; 11 ALT 200 . However, where rules of court permit service of documents (including documents in relation to an appeal) on the lawyer on the record the lawyers authority in respect of service of such documents will continue as will the lawyers duty to the client: Lady de la Pole v Dick (1885) 29 Ch D 351 at 356-7; 54 LJ Ch 940; 52 LT 457 . Compare Re Woolf [1932] VLR 465 . See further Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 All ER 1049; [1980] 1 WLR 614 at 623 .4 Underwood Son & Piper v Lewis [1894] 2 QB 306 ; Re Romer & Haslam [1893] 2 QB 286 at 298 ; Warmingtons v McMurray [1936] 2 All ER 745 (affirmed Warmingtons v McMurray [1937] 1 All ER 562 , CA); Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 All ER 1049; [1980] 1 WLR 614 ; Ahmed v Russell Kennedy (a firm) BC200000911; [2000] VSC 41 .5 This involves the completion of the business contracted for with the lawyers remuneration becoming due only upon completion: Underwood Son & Piper v Lewis [1894] 2 QB 306 at 30910 per Esher MR; Del Borrello v Friedman and Lurie (a firm) BC200106989; [2001] WASCA 348 ; Adamson v Williams BC200100324; [2001] QCA 38. Compare Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 All ER 1049 at 1051; [1980] 1 WLR 614 at 616 .6 Cachia v Isaacs (1985) 3 NSWLR 366 (contentious business); Underwood Son & Piper v Lewis [1894] 2 QB 306 (contentious business); Re Hall and Barker (1878) 9 Ch D 538 (contentious business); J H Milner & Son v Percy Bilton Ltd [1966] 1 WLR 1582 (non-contentious business); Chamberlain v Boodle & King (a firm) [1982] 3 All ER 188; [1982] 1 WLR 1443 at 1445-6 per Denning MR (non-contentious business); Caldwell v Treloar (1982) 30 SASR 202 .7 Cachia v Isaacs (1985) 3 NSWLR 366 at 377 ( whether a retainer is or is not an entire contract and in what circumstances a retainer may be terminated involves no more than the application to a solicitor and client contract of the principles generally applicable to contracts except to the extent that questions of public policy intrude). There is a distinction between employing a solicitor to conduct an action and employing a solicitor to resolve a persons difficulties generally (which may involve several actions extending over a period of years); the latter situation is not within the doctrine of entire contract: Warmingtons v McMurray [1936] 2 All ER 745 at 749 per Goddard J (affirmed Warmingtons v McMurray [1937] 1 All ER 562 ); Idea Technology Services Pty Ltd v Nguyen BC200100600; [2001] QSC 24.8 Chamberlain v Boodle & King (a firm) [1982] 3 All ER 188; [1982] 1 WLR 1443 ; Re Romer & Haslam [1893] 2 QB 286 ; Underwood Son & Piper v Lewis [1894] 2 QB 306 ; Re Hall and Barker (1878) 9 Ch D 538 .9 Underwood Son & Piper v Lewis [1894] 2 QB 306 at 311, 315 . Good cause may include: (1) a failure by the client to provide money for necessary disbursements (Underwood Son & Piper v Lewis [1894] 2 QB 306 at 311 ; Warmingtons v McMurray [1936] 2 All ER 745 at 748 ; Harris v Osbourn (1834) 2 Cr & M 629; 149 ER 912 ; Robins v Goldingham (1872) LR 13 Eq 440; Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 All ER 1049; [1980] 1 WLR 614 at 623) ; (2) an insistence on the part of the client that some step be taken which the solicitor knows to be dishonourable or where the client has hindered or prevented the solicitor from continuing to act (Underwood Son & Piper v Lewis [1894] 2 QB 306 at 314) ; or (3) where it is ascertained that an action reasonably and properly commenced cannot be maintained: Lawrence v Potts (1834) 6 C & P 428; 172 ER 1306 . For an example of where the requirements of good cause and reasonable notice were not satisfied see Chisholm v State Transport Authority (1986) 41 SASR 317 .10 Court v Berlin [1897] 2 QB 396 at 399, 400, 401 ( client withdrawing a retainer in contentious business). See also Re Wingfield and Blew (Solicitors) [1904] 2 Ch 665 at 671, 678, 681 ( in non-contentious

business a client is entitled to terminate the retainer at any time unless it is an entire contract). In such a case the client is not entitled to withdraw a retainer before the time for performance is completed unless a term can be implied enabling the client to terminate the retainer: J H Milner & Son v Percy Bilton Ltd [1966] 1 WLR 1582 at 1588-9 .11 Re Wingfield and Blew (Solicitors) [1904] 2 Ch 665 at 684 . The paragraph below is current to 28 August 2002 [250-470] Nature of relationship The relationship between a lawyer and a client is, in most cases, a contractual relationship.1 It is an implied term of a contract between a lawyer and client that the lawyer will exercise requisite degree of reasonable skill and care.2 A lawyer may be liable in tort for breach of a duty of care owed to a client independently of any liability in contract.3 The duty of care arising under a contract of retainer relates to the instructions given by the client.4 The terms of the contract of retainer may not, however, exclusively define the limits of a lawyers duties, as additional duties may lie in tort.5 Apart from the relationship between a lawyer and his or her client in contract or in tort, a lawyer has a fiduciary relationship with the client.6 A lawyer acts as the agent of the client in all matters that may reasonably be expected to arise in the cause.7 Notes 1 As to the formation of the relationship of lawyer and client generally see [250-450]. As to the establishment of such a relationship other than by an express contract of retainer see [250-450] note 9.2 Nocton v Lord Ashburton [1914] AC 932 at 956; [1914-15] All ER Rep 45 ; Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 at 193-4; [1994] 3 All ER 506; [1994] 3 WLR 761 . However, see Hawkins v Clayton (1988) 164 CLR 539 at 585; 78 ALR 69; 62 ALJR 240 per Deane J (there is neither justification nor need for the implication of a contractual term which, in the absence of actual intention of the parties, imposes a contractual duty co-extensive in content and concurrent in operation with a duty already existing under the common law of negligence). This view of Deane J was, in turn, disapproved in Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 at 192-194; [1994] 3 All ER 506; [1994] 3 WLR 761 per Lord Goff of Chieveley. The approach adopted by the House of Lords was accepted in Astley v Austrust Ltd (1999) 197 CLR 1; 161 ALR 155; [1999] HCA 6; BC9900546 . See also Heydon v NRMA Ltd (2000) 51 NSWLR 1 at 117-19; 36 ACSR 462; (2001) 19 ACLC 1 .3 MacPherson v Kevin J Prunty & Associates [1983] 1 VR 573 ; Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (a firm) [1979] Ch 384; [1978] 3 All ER 571; [1978] 3 WLR 167 ; Aluminium Products (Qld) Pty Ltd v Hill [1981] Qd R 33 . In these cases a lawyer was held to be concurrently liable to the lawyers client both in contract and in tort for the negligent discharge of the lawyers duties. See also Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 at 530; [1963] 2 All ER 575 ; Henderson v Merrett Syndicates Ltd [1995] 2 AC 145; [1994] 3 All ER 506; [1994] 3 WLR 761 . As to the duties of care owed by a legal practitioner see [250-580].4 Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (a firm) [1979] Ch 384 at 402; [1978] 3 All ER 571; [1978] 3 WLR 167 ; OReilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 213 ; Un v Schroter BC200200010; [2002] NTSC 2 .5 Hill v Van Erp (1997) 188 CLR 159; 142 ALR 687; 71 ALJR 487 ; Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642 at 652, 665; (1990) ANZ ConvR 230 ; Blackwell v Barroile Pty Ltd (1994) 51 FCR 347; 123 ALR 81 at 101 ; Westcoast Clothing Co Pty Ltd v Freehill Hollingdale & Page [1999] Aust Torts Reports 81-518; BC9904437; Walmsley v Cosentino BC200107668; [2001] NSWCA 403 ; Curnuck v Nitschke BC200103388; [2001] NSWCA 176 ; McGee OCallaghan Gill Pty Ltd v Deacons Graham & James (2001) ANZ ConvR 614; BC200104199.6 Maguire v Makaronis (1997) 188 CLR 449; 144 ALR 729; 71 ALJR 781 ; Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 at 169, 170 ; Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 at 739 ; Stewart v Layton (t/as B M Salmon Layton & Co) (1992) 111 ALR 687 at 709 ; Re Fabricius and McLaren (1989) 91 ACTR 1 at 7-8 ; Farrington v Rowe McBride & Partners [1985] 1 NZLR 83 at 89 ; Re Van Laun; Ex parte Chatterton [1907] 2 KB 23 at 29; (1907) 97 LT 69 ; Beach Petroleum NL v Abbott Tout Russell Kennedy (1997) 26 ACSR 114; 16 ACLC 494 at 253-72 ; IMB Society Ltd v

White BC200007213; [2000] NSWSC 1085 . As to a lawyers fiduciary duties to a client see [250-545].7 Spedley Securities Ltd (in liq) v Bank of New Zealand (1991) 26 NSWLR 711 at 72930; 6 ACSR 331; ATPR 41-143 ; Griffiths v Evans [1953] 2 All ER 1364 at 1371; [1953] 1 WLR 1424 at 1431 ; Great Atlantic Insurance Co v Home Insurance Co [1981] 2 All ER 485; [1981] 1 WLR 529 at 539, 540 . As to the relationship of principal and agent generally see agency. The paragraph below is current to 28 August 2002 For new cases see ACL Reporter To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [250-475] Authority in non-litigious matters The authority of a lawyer to act for the lawyers client arises from the retainer1 and the authority encompasses all that which it is the lawyers duty to do under the retainer.2 Where a lawyer is retained to settle written terms of sale in respect of land and to negotiate and agree with the terms proposed to be put to each of the parties, the lawyer does not have authority to contract on behalf of the client to sell or purchase the land.3 Where a lawyers instructions are to complete a sale or purchase rather than simply to negotiate a contract, the lawyer has authority to bind the client.4 However, the lawyer does not have authority, including ostensible authority, to agree to a variation of the contract or the form and the contents of the contract.5 Subject to any express instructions, a lawyer acting in relation to a contract for the sale of land has implied and ostensible authority to bring about an exchange of contracts by any effective method.6 For the purposes of statutory provisions requiring a memorandum in writing7 in relation to a contract for the sale of land, a lawyer must be so authorised in order to provide such a memorandum.8 Where particular documents which together constitute a memorandum of a contract are forwarded by a lawyer to a third party in accordance with the lawyers authority, the fact that the lawyer does not contemplate that the documents would constitute a memorandum of a contract does not prevent the legal consequences flowing from the forwarding.9 Where a lawyer has authority only to deny there was a contract, the lawyer does not have authority to create a memorandum rendering the contract enforceable against the client.10 In the absence of a statutory provision to the contrary, the lawyer has general authority to sign a notice to quit where he or she is instructed to obtain possession of property on behalf of a landlord.11 Where moneys are paid by way of deposit on a contract for the sale of land to the lawyer acting for the vendor without any statement in the contract that the moneys are paid to the lawyer as stakeholder, the lawyer holds the money as agent for the vendor and the payment is equivalent to payment to the vendor.12 In order for payment of moneys by a mortgagor to a lawyer acting on behalf of the mortgagee to be a payment to the mortgagee, the lawyer must be authorised by statute13 or be otherwise authorised expressly or by implication.14 Unless expressly authorised to do so a lawyer does not have authority to receive notices on behalf of the lawyers client.15 It was formerly the law that where a lawyer is authorised to receive a payment on behalf of a client, the lawyer must not accept payment other than in cash unless the lawyer is specifically authorised to do so.16 This is no longer the law in Australia and a lawyer may accept a cheque unless directed otherwise.17 Notes 1 As to retainer see [250-450], [250-465].2 The duties owed by a lawyer to a client depend upon the terms and limits of the retainer: see [250-465] note 1. The extent of the lawyers authority is

determined by the duties owed to a particular client: Rowe v Johnson [1928] VLR 515 at 520 . It has been observed that the nature and extent of the lawyers authority may be more readily inferred to be of a wider compass in the case of litigious business than in the case of nonlitigious business: CIC Insurance Ltd v Bankstown Football Club Ltd (1995) 8 ANZ Ins Cas 61232 at 75,554-6; 23 ABLR 401 per Kirby P.3 Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146; [1965] ALR 737; (1964) 38 ALJR 232 . See also Raingold v Bromley [1931] 2 Ch 307 at 318 ; Strangas v Young (1975) 1 BPR 9123 ; Bowen v Duc dOrleans (1900) 16 TLR 226; Smith v Webster (1876) 3 Ch D 49 .4 North v Loomes [1919] 1 Ch 378 ; Koenigsblatt v Sweet [1923] 2 Ch 314; (1923) 92 LJ Ch 598; 129 LT 659 .5 Nowrani Pty Ltd v Brown [1989] 2 Qd R 582 ; CTM Nominees Pty Ltd v Galba Pty Ltd (1982) 2 BPR 9588 ; Longpocket Investments Pty Ltd v Hoadley (1985) 3 BPR 9606; (1986) ANZ ConvR 756; (1985) NSW ConvR 55-244 . Compare Magripilis v Baird [1926] St R Qd 89 ; Legione v Hateley (1983) 152 CLR 406 at 421, 437; 46 ALR 1; 57 ALJR 292 (held it was within the ostensible authority of the lawyers for the vendors in a contract for sale of land that the vendors would not treat the contract as rescinded if settlement took place within a period additional to that specified in the contract); Re Morrison; Bennell v Smith [1962] Tas SR 337 (where it is accepted conveyancing practice to do so a mortgagee or the mortgagees solicitor has implied authority to fill in particular blanks in a mortgage instrument).6 Domb v Isoz [1980] Ch 548; [1980] 1 All ER 942; [1980] 2 WLR 565 ; Elias v Bova (1999) NSW ConvR 55-917; BC9905213.7 As to a memorandum in writing in relation to a contract for sale see real property [355-4500]-[355-5050].8 Daniels v Trefusis [1914] 1 Ch 788 ; Grindell v Bass [1920] 2 Ch 487 (a pleading signed by counsel). As to the authority of a lawyer who has been authorised to complete a sale or purchase see North v Loomes [1919] 1 Ch 378 ; Koenigsblatt v Sweet [1923] 2 Ch 314; (1923) 92 LJ Ch 598; 129 LT 659 ; Wright v Pepin [1954] 2 All ER 52; [1954] 1 WLR 635 (a lawyer employed by a client to put a clients affairs in order has authority to make acknowledgment of a debt owed by the client). Compare Bowring-Hansburys Trustee v Bowring-Hanbury [1943] Ch 104 ; Gavaghan v Edwards [1961] 2 QB 220 (where a lawyer acting for both parties made a memorandum as to a date of completion which each of the parties had agreed to and endorsed a note to that effect by letter sent to the purchaser, it was held that there was no conflict of interest between the parties which would prevent the solicitor from creating the additional memorandum); Smith v Mansi [1962] 3 All ER 857; [1963] 1 WLR 26 ; Council of the Law Institute of Victoria v A Solicitor [1993] 1 VR 361 at 366-368 .9 Daniels v Trefusis [1914] 1 Ch 788 .10 Thirkell v Cambi [1919] 2 KB 590 .11 Commonwealth v K N Harris Pty Ltd [1965] NSWR 63 .12 Edgell v Day (1865) LR 1 CP 80; Ellis v Goulton [1893] 1 QB 350 ; Bamford v Shuttleworth (1840) 11 Ad & El 926; 113 ER 666 .13 See, for example: (TAS) Conveyancing and Law of Property Act 1884 s 69 (VIC) Property Law Act 1958 s 69. See also (VIC) Trustee Act 1958 s 28. 14 Martin v Diamantikos [1964] VR 593 (the fact that the lawyer is in possession of security is not of itself sufficient to authorise the lawyer to receive principal moneys on the mortgagees behalf nor is the mere fact that the lawyer is authorised to receive interest payable under the mortgage sufficient to clothe the lawyer with authority to receive the principal; the circumstances of the payment of the principal and interest may, however, be sufficient to clothe the lawyer for the mortgagee with authority to receive principal moneys). See also Cousens v Grayridge Pty Ltd BC200003313; [2000] VSCA 96 ; Wilkinson v Candlish (1850) 5 Exch 91; 155 ER 39; Kent v Thomas (1856) 1 H & N 473; 156 ER 1287; Jared v Walki (1902) 18 TLR 569; Bonham v Maycock [1928] All ER Rep 79; (1928) 44 TLR 387; Fisher v Rumney (1911) 7 Tas LR 104 ; Re Evans; Ex parte Jones (1911) 7 Tas LR 122 ; Rowe v Johnson [1928] VLR 515 (solicitor acting for both mortgagor and mortgagee under duty to do all things necessary and proper to carry out the transaction including what should be done to safeguard the interests of each party).15 Singer v Trustee of the Property of Munro (bankrupt) [1981] 3 All ER 215 sub nom Re Munro; Ex parte Singer v Trustee in Bankruptcy [1981] 1 WLR 1358 See also Saffron Walden Second Benefit Building Society v Rayner (1880) 14 Ch D 406 ; Arden v Arden (1885) 29 Ch D 702 at 709; 54 LJ Ch 655; 52 LT 610 .16 Blumberg v Life Interests and Reversionary Securities Corp [1897] 1 Ch 171 (affirmed Blumberg v Life Interests and Reversionary

Securities Corp [1898] 1 Ch 27 ); Bridges v Garrett (1870) LR 5 CP 451; Pearson v Scott (1878) 9 Ch D 198 at 207; 38 LT 747 ; Pape v Westacott [1894] 1 QB 272 at 278; (1893) 70 LT 18 per Lindley LJ.17 George v Cluning (1979) 28 ALR 57 at 59 per Barwick CJ; 62-3 per Mason J; Re Parker (decd) (1985) 79 FLR 338 ; Deputy Cmr of Taxation v Barroleg Pty Ltd (1997) 25 ACSR 167 at 177; 15 ACLC 1,451 ; National Australia Bank Ltd v Market Holdings Pty Ltd (in liq) (2001) 161 FLR 1 at 21; 37 ACSR 629; 19 ACLC 710; Tannous v Cipolla Bros Holdings Pty Ltd (2001) ANZ ConvR 430; (2002) NSW ConvR 56-001. The paragraph below is current to 28 August 2002 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [250-480] Authority in litigious matters A lawyer must be given a special authority by a client to institute proceedings on behalf of the client.1 A retainer to conduct proceedings on behalf of a client authorises a lawyer to do all things necessary and proper for the conduct of the proceedings.2 The issue of a lawyers authority to institute proceedings cannot be raised by way of defence to those proceedings3 except in circumstances where it is clear that a purported party is legally incapable of authorising the proceedings.4 Where a lawyer acts for a plaintiff or a defendant without authority, the lawyer may be held liable for the costs of the opposing party.5 Subject to express prohibition or limitation imposed by the client, a lawyer retained in an action has implied authority as between the lawyer and the client to compromise the proceedings6 subject to certain reservations.7 A lawyer has ostensible authority as between the lawyer and the clients opponent to compromise the proceedings.8 Where it is necessary to seek the assistance of the court to enforce a compromise made by a lawyer beyond the lawyers actual authority but within the lawyers ostensible authority, the court has a discretion to decline to enforce the compromise where this would involve injustice.9 A lawyer owes responsibilities to a person shown by court records to be a party whom the lawyer represents and responsibilities to the court for representing such a person.10 A lawyers authority continues after judgment for the purpose of taking steps in relation to execution11 and receiving notice of appeal. 12 A lawyer has no authority to commence proceedings that are substantially new and distinct proceedings from the original proceedings.13 Notes 1 Hawkins Hill Gold Mining Co v Briscoe (1887) 8 LR (NSW) Eq 123 ; Atkinson v Abbott (1855) 3 Drew 251; 61 ER 899 ; Wray v Kemp (1884) 26 Ch D 169 ; Schjott v Schjott (1881) 19 Ch D 94 ; Danish Mercantile Co Ltd v Beaumont [1951] Ch 680; [1951] 1 All ER 925 (where proceedings have been instituted on behalf of a party without authority it is open to the purported plaintiff to adopt the proceedings and instruct the solicitor to continue them). See also Chartspike Pty Ltd (in liq) v Chahoud BC200006418; [2000] NSWSC 625 ; Victoria Teachers Credit Union Ltd v KPMG [2000] 1 VR 654.2 Re Bill of Costs; Ex parte Maxwell (1955) 72 WN (NSW) 333 ; Re Newen; Carruthers v Newen [1903] 1 Ch 812; (1903) 72 LJ Ch 356; 88 LT 264 ; CIC Insurance Ltd v Bankstown Football Club Ltd (1995) 8 ANZ Ins Cas 61-232 at 75,555; 23 ABLR 401 per Kirby P (reversed on a different point CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384; 141 ALR 618; 71 ALJR 312 ).3 Richmond v Branson & Son [1914] 1 Ch 968 ; Russian Commercial and Industrial Bank v Comptoir dEscompte de Mulhouse [1925] AC 112 at 130 ; Banco de Bilbao v Sancha [1938] 2 KB 176 at 192; [1938] 2 All ER 253 ; John Shaw and Sons (Salford) Ltd v Shaw [1935] 2 KB 113; [1935] All ER Rep 456 .4 Daimler Co Ltd v Continental Tyre and Rubber Co (Great Britain) Ltd [1916] 2 AC 307; [1916-17] All ER Rep 191 ; John Shaw and Sons (Salford) Ltd v Shaw [1935] 2 KB 113 at 130-2, 144-5; [1935] All ER Rep 456 . The proper method of raising an issue of absence of authority is on application to stay the proceedings or to strike out the defence: see note 5 below. See also Yonge v Toynbee

[1910] 1 KB 215; [1908-10] All ER Rep 204 ; Lickiss v Docking BC200104320; [2001] TASSC 84 .5 Newbiggin-by-the-Sea Gas Co v Armstrong (1879) 13 Ch D 310 ; John Morley Building Co v Barras [1891] 2 Ch 386; (1891) 64 LT 856 ; Yonge v Toynbee [1910] 1 KB 215; [1908-10] All ER Rep 204 ; NABL v Minister for Immigration & Multicultural Affairs BC200200251; [2002] FCA 102 at [69]-[92] (exercise of judicial discretion not to impose an order for costs for the successful party, in view of hardship of the applicants); Geilinger v Gibbs [1897] 1 Ch 479 ; Simmons v Liberal Opinion Ltd; Re Dunn [1911] 1 KB 966; [1911-13] All ER Rep 281 ; Schjott v Schjott (1881) 19 Ch D 94 ; Fricker v Van Grutten [1896] 2 Ch 649 ; Ferne v Gorlitz [1915] 1 Ch 177 ; Salton v New Beeston Cycle Co [1900] 1 Ch 43; (1889) 81 LT 437 (lawyer not held liable for costs for acting upon an authority to begin or defend proceedings until the lawyer knew, or by the exercise of due diligence might have known, of a subsequent revocation of the lawyers authority).6 Donellan v Watson (1990) 21 NSWLR 335; Aust Torts Reports 81-066 ; Hansen v Marco Engineering (Aust) Pty Ltd [1948] VLR 198 ; Wells v DAmico [1961] VR 672 ; Harvey v Phillips (1956) 95 CLR 235; SR (NSW) 223; 73 WN (NSW) 319 ; Buseska v Sergio (1990) 102 FLR 157 ; Chown v Parrott (1863) 14 CBNS 74; 143 ER 372 ; Prestwich v Poley (1865) 18 CBNS 806; 144 ER 662 ; Little v Spreadbury [1910] 2 KB 658; (1910) 102 LT 829 ; Waugh v H B Clifford & Sons Ltd [1982] Ch 374; [1982] 1 All ER 1095; [1982] 2 WLR 679 ; Swinfen v Lord Chelmsford (1860) 5 H & N 890; 157 ER 1436 ; Thompson v Howley [1977] 1 NZLR 16 ; Welsh v Roe [1918-19] All ER Rep 620; (1918) 87 LJKB 520; 118 LT 529 .7 In the absence of express authority, a lawyer has no authority to effect a compromise until proceedings are instituted: Macaulay v Polley [1897] 2 QB 122; (1897) 76 LT 643 ; Conlon v Conlons Ltd [1952] 2 All ER 462 ; Welsh v Roe [1918-19] All ER Rep 620; (1918) 87 LJKB 520; 118 LT 529 . The implied authority does not extend to matters that are collateral to the action in that they involve extraneous subject matters: Waugh v H B Clifford & Sons Ltd [1982] Ch 374; [1982] 1 All ER 1095; [1982] 2 WLR 679 . See also Von Schulz v Morriello BC9804100; [1998] QCA 236 . Similarly, an agreement between lawyers acting for the opposing parties as to the conduct of proceedings is binding as between the lawyer and the client even if the client disapproved of the agreement, unless the opposing party was aware of that disapproval: Crearar v Harcoan (1897) 23 VLR 56 .8 Donellan v Watson (1990) 21 NSWLR 335; Aust Torts Reports 81-066 ; Hansen v Marco Engineering (Aust) Pty Ltd [1948] VLR 198 ; Wells v DAmico [1961] VR 672 ; Harvey v Phillips (1956) 95 CLR 235; SR (NSW) 223; 73 WN (NSW) 319 ; Buseska v Sergio (1990) 102 FLR 157 ; Waugh v H B Clifford & Sons Ltd [1982] Ch 374; [1982] 1 All ER 1095; [1982] 2 WLR 679 ; Butler v Knight (1867) LR 2 Ex 109; Thompson v Howley [1977] 1 NZLR 16 .9 Insbury Pty Ltd v Craig [1990] 1 Qd R 309 ; Neale v Gordon Lennox [1902] AC 465; [1900-3] All ER Rep 622 ; Harvey v Phillips (1956) 95 CLR 235; SR (NSW) 223; 73 WN (NSW) 319 ; Marsden v Marsden [1972] 2 All ER 1162; [1972] 3 WLR 136; [1972] Fam 280 . Where a case is not one where the powers of the court need to be invoked to carry out the terms of the underlying agreement, the compromise reached by solicitors where one partys solicitor had ostensible authority but not actual authority could not be ignored on some basis that relied on an undefined interest of justice falling short of an equitable ground for recission or frustration: Buseska v Sergio (1990) 102 FLR 157 . Where consent is given by mistake on the part of a lawyer, it may be withdrawn before an order is made where the consent of the court is sought as part of the arrangement to enforce the compromise: Thompson v Howley [1977] 1 NZLR 16 . Where a court is called upon to make an order on the basis of a compromise and it is seen that the client had not really consented, the court could and generally would refuse to make the order: Hansen v Marco Engineering (Aust) Pty Ltd [1948] VLR 198 ; Neale v Gordon Lennox [1902] AC 465; [1900-3] All ER Rep 622 ; Little v Spreadbury [1910] 2 KB 658; (1910) 102 LT 829 ; Holt v Jesse (1876) 3 Ch D 177; 46 LJ Ch 254 ; Shepherd v Robinson [1919] 1 KB 474; (1919) 120 LT 492 . Where real consent is given it cannot be withdrawn: Harvey v Croydon Union Rural Sanitary Authority (1884) 26 Ch D 249; [1881-85] All ER Rep 1031 . See also Matthews v Munster (1887) 20 QBD 141 .10 Toyota Motor Corp Australia Ltd v Ken Morgan Motors Pty Ltd [1994] 2 VR 106 at 165, 179, 210, 214 . As to provisions of rules of court in respect of the recording, change and removal of the names of lawyers on court records see: (CTH) High Court Rules O 7 (CTH) Federal Court Rules O 45

(ACT) Supreme Court Rules O 8 (NT) Supreme Court Rules O 20 (NSW) Supreme Court Rules Pt 66 (QLD) Uniform Civil Procedure Rules 1999 rr 986-94 (SA) Supreme Court Rules R 11 (TAS) Supreme Court Rules 2000 Pt 7 Div 8 (VIC) Supreme Court (General Civil Procedure) Rules O 20 (WA) Rules of the Supreme Court O 8. 11 Bevins v Hulme (1846) 15 M & W 88 at 96; 153 ER 773 at 776 ; Bagley v Maple & Co Ltd (1911) 27 TLR 284. Compare Lee v Melbourne & Suburban Railway Co (1861) 1 W & W (L) 34 at 38, 39 (held that an attorney was no longer an agent of the client either to pay money or receive a demand for payment after taxation of costs). The view has been expressed that a lawyer has no authority to compromise on behalf of the lawyers client after judgment: Butler v Knight (1867) LR 2 Ex 109 at 113. However, in principle it would appear that a lawyer has such authority while a judgment remains unsatisfied: see, for example, Lady de la Pole v Dick (1885) 29 Ch D 351 at 356-7; 54 LJ Ch 940; 52 LT 457 .12 Lady de la Pole v Dick (1885) 29 Ch D 351 at 356-7; 54 LJ Ch 940; 52 LT 457 ; Milera v Wilson (1980) 23 SASR 485 . See further: (CTH) High Court Rules O 7 r 2 (CTH) Federal Court Rules O 45 r 3 (ACT) Supreme Court Rules O 8 r 2 (NT) Supreme Court Rules r 20.01 (NSW) Supreme Court Rules Pt 66 rr 3, 8 (QLD) Uniform Civil Procedure Rules 1999 r 987 (SA) Supreme Court Rules R 11.06 (TAS) Supreme Court Rules 2000 r 129 (VIC) Supreme Court (General Civil Procedure) Rules r 20.01, 20.03 (WA) Rules of the Supreme Court O 8 r 2. 13 Re Wingfield and Blew (Solicitors) [1904] 2 Ch 665 at 682 ; Gordon v Gordon [1904] P 163 at 176-7 ; James v Ricknell (1887) 20 QBD 164 .

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(II) Retaining Liens The paragraph below is current to 24 October 2003 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [250-1030] Property affected by retaining lien Generally, a retaining lien may exist over any of a clients deeds, papers or other items of personal property that come into a solicitors possession in the course of his or her employment by the client1 in his or her capacity as a solicitor.2 A retaining lien does not exist over property that has not come into a solicitors possession.3 A retaining lien does not exist where its existence is expressly excluded by agreement,4 or where the conduct of dealings between the solicitor and his or her client excludes its existence.5 Property that may be the subject of a retaining lien includes: (1) bills of exchange;6 (2) cheques;7 (3) insurance policies;8 (4) share certificates;9

(5) applications for shares;10 (6) title deeds;11 (7) certificates of title;12 (8) debenture trust deeds;13 (9) letters patent;14 (10) letters of administration;15 and (11) money.16 A solicitor cannot hold a lien over: (1) a clients original will;17 (2) a clients original court records;18 or (3) property of a client that is required by statute or by a corporate clients articles of association to be kept in a certain manner, or to be available for a prescribed purpose such as inspection.19 Notes 1 Bolster v McCallum [1966] 2 NSWR 660; (1966) 85 WN (Pt 1) (NSW) 281 at 286 per Asprey JA, CA(NSW); Bennett & Co v CLC Corp (2001) 23 WAR 344; 37 ACSR 96 ; WFM Motors Pty Ltd v Maydwell (1994) 6 BPR 13,381; ANZ ConvR 454 ; Stevenson v Blakelock (1813) 1 M & S 535; 105 ER 200; Warburton v Edge (1839) 9 Sim 508; 8 LJ Ch 111; 59 ER 454 . Once a lien is established in favour of a firm, it is not affected by the arrival of new partners: Pelly v Wathen (1849) 7 Hare 351; 18 LJ Ch 281; 68 ER 144. After dissolution of a firm, an ex-partner cannot establish a lien on property later coming into his or her possession for the costs of the firm: Re Gough; Lloyd v Gough (1894) 70 LT 725.2 Leeper v Primary Producers Bank of Australia Ltd (in vol liq) (1935) 53 CLR 250; 9 ALJ 35 ; Bolster v McCallum [1966] 2 NSWR 660; (1966) 85 WN (Pt 1) (NSW) 281 , CA(NSW); Queanbeyan Leagues Club Ltd v Poldune Pty Ltd

BC200106558; [2001] NSWSC 831 ; Margiotta v Legal Services Commissioner BC200005433; [2000] NSWSC 835 ; Re Bagomba Pastoral Co Pty Ltd BC9905658; [1999] NSWSC 902 ; Re Suttor (1890) 11 LR (NSW) L 401; 7 WN (NSW) 83; Ex parte Fuller; Re Long (1881) 16 Ch D 617 . A retaining lien may not be claimed where a clients property comes into a solicitors possession in a capacity other than as a solicitor, such as a mortgagee (Annesleys Case (1854) 2 Drew 408; 23 LJ Ch 793; 61 ER 777 ; Pelly v Wathen (1849) 7 Hare 351; 18 LJ Ch 281; 68 ER 144), as a trustee (Re Clark; Ex parte Newland (1876) 4 Ch D 515 ; Re Gough; Lloyd v Gough (1894) 70 LT 725) or as a land agent: Read v Tidemann (1866) 1 SALR 46; Re Walker; Meredith v Walker (1893) 68 LT 517. A retaining lien will not exist if, at the time at which a demand is made for the property on which the lien is claimed, the property that was at one time held by the solicitor in his or her professional capacity is now held on another basis: Barratt v Gough-Thomas [1951] Ch 242; [1950] 2 All ER 1048 (documents held by solicitor as mortgagor). Compare Re Wright (1906) 3 Tas LR 1 . As to the effect of a retaining lien in respect of the rights of a liquidator of a company see (CTH) Corporations Act 2001 s 530B. See also Bennett & Co v CLC Corp (2001) 23 WAR 344; 37 ACSR 96 .3 Ex parte Patience; Makinson v Minister (1940) 40 SR (NSW) 96 at 100; 57 WN (NSW) 65 per Jordan CJ; Re De Groot [2001] 2 Qd R 359 .4 Re Messenger; Ex parte Calvert (1876) 3 Ch D 317 at 318-19 per Bacon CJ.5 Leeper v Primary Producers Bank of Australia Ltd (in vol liq) (1935) 53 CLR 250; 9 ALJ 35 (document obtained for a particular purpose). Where property comes into the possession of a solicitor for a specific purpose under an agreement that does not provide for the existence of a retaining lien, there will be no retaining lien unless the property is subsequently left in the solicitors possession for general purposes (Re Mid-Kent Fruit Factory [1896] 1 Ch 567; (1896) 74 LT 22 ) or a lien is expressly provided for: Brandao v Barnett (1846) 3 CB 519; [1843-60] All ER Rep 719; (1846) 8 ER 1622; 136 ER 207 ; Stumore v Campbell & Co [1892] 1 QB 314 at 316 . Where money is received by a lawyer for the purposes of payment of legal costs, it may be subject to a general lien: Stewart v Strevens [1976] 2 NSWLR 321 . Generally, money held in trust accounts is held by solicitors as trustees, but subject to a statutory right of transfer for payment of fees: see generally [250-1815]-[250-2000]. See also note 16 below.6 Gibson v May (1853) 4 De GM & G 512; 43 ER 607 ; Redfern and Sons v Rosenthal Bros (1902) 86 LT 855.7 Hanson v Reece (1857) 27 LJ Ch 118.8 West of England Bank v Batchelor (1882) 51 LJ Ch 199.9 General Share Trust Co Ltd v Chapman (1876) 1 CPD 771; 46 LJQB 79; 36 LT 179.10 Re Capital Fire Insurance Assn (1883) 24 Ch D 408 .11 Re Wright (1906) 3 Tas LR 1 .12 Re Hensbergen and Aikman; Ex parte Cleland (1950) 15 ABC 238 ; Bennett & Co v CLC Corp (2001) 23 WAR 344; 37 ACSR 96 .13 Re Dee Estates Ltd; Wright v Dee Estates Ltd [1911] 2 Ch 85 .14 Re Aubusson; Ex parte Soloman (1821) 1 Gl & J 25.15 Barnes v Durham (1869) LR 1 P & D 728; Re Martin (1883) 13 IR 312.16 Miller v Atlee (1849) 3 Exch 799; 154 ER 1068 (amount due to the solicitor); Re Phoenix Life Assurance Co (Howard and Dollmans Case) (1863) 1 Hem & M 433; 71 ER 189. Money in a clients trust account may be the subject of a retaining lien: Loescher v Dean [1950] Ch 491; [1950] 2 All ER 124 ; Prekookeanska Plovidba v LNT Lines Srl [1988] 3 All ER 897 at 899; [1989] 1 WLR 753 per Hirst J; Johns v Law Society of New South Wales [1982] 2 NSWLR 1 ; Re a Barrister and Solicitor (1979) 40 FLR 26 at 39 ; Gilshenan & Luton v Cmr of Taxation (Cth) [1984] 1 Qd R 199 at 204-6; (1983) 74 FLR 398; 15 ATR 30; 83 ATC 4758 per Andrews SPJ; Kirk v Cmr of Australian Federal Police (1988) 19 FCR 530; 81 ALR 321 ; Re Jalmoon Pty Ltd [1986] 2 Qd R 264 . Compare Stewart v Strevens [1976] 2 NSWLR 321 (retaining lien does not give solicitor the right to withdraw money from a trust account without authorisation); WFM Motors Pty Ltd v Maydwell (1994) 6 BPR 13,381; ANZ ConvR 454 (solicitor does not have possession of money in trust account, but merely a chose in action against the bank, and therefore generally has no retaining lien); Shand v M J Atkinson Ltd (in liq) [1966] NZLR 551 .17 Georges v Georges (1811) Ves 294; 34 ER 328 ; Balch v Symes (1823) Turn & R 87; 37 ER 1028 (a deed made in favour of the solicitor reserving a life interest and power of revocation to the client).18 Bird v Heath (1848) 6 Hare 236; 67 ER 1154; Clifford v Turrill (1848) 2 De G & Sm 1; 64 ER 1.19 Re Capital Fire Insurance Assn (1883) 24 Ch D 408 at 418-9 per Cotton LJ; DTC (CNC) Ltd v Gary Sargeant & Co (a firm) [1996] 2 All ER 369; [1996] 1 WLR 797 at 800-1 per Crystal QC (acting as Deputy High Court Judge). For the right to hold a lien over property the subject of bankruptcy see McLeish v Palmer (1921) 22 SR (NSW) 53; 39 WN (NSW) 1 . Compare Re

Moseley; Ex parte Official Receiver (1953) 16 ABC 195 . See also Bennett & Co v CLC Corp (2001) 23 WAR 344; 37 ACSR 96 (effect on a lien of (CTH) Corporations Act 2001 s 530B). The paragraph below is current to 24 October 2003 [250-1035] Extent of retaining lien A retaining lien encompasses a solicitors 1 taxable costs, charges and expenses that are incurred in his or her capacity as a solicitor2 on the instructions of the client3 against whom the lien is claimed, and for which the client is personally liable.4 The lien is a general lien extending to all costs due5 to the solicitor and is not limited to the costs incurred in relation to the particular property in question or upon the particular instructions pursuant to which the property came into the solicitors possession.6 The lien may encompass costs that the solicitor is statute-barred from recovering,7 but does not extend to costs which are irrecoverable because the solicitor was not qualified at the time the work to which the costs relate was done8 or because the retainer was illegal.9 A retaining lien does not affect, and is not affected by, a right of set-off.10 Notes 1 As to the term solicitor see [250-1] note 8.2 Re Galland (1885) 31 Ch D 296 ; Re Taylor, Stileman & Underwood [1891] 1 Ch 590; (1891) 60 LJ Ch 525 . The lien does not extend to general debts owing to the solicitor other than in his or her professional capacity: Worrall v Johnson (1820) 2 Jac & W 214; 37 ER 609; Re Walker; Meredith v Walker (1893) 68 LT 517.3 Meguerditchian v Lightbound [1917] 2 KB 298; [1916-17] All ER Rep 565; (1917) 116 LT 790 ; Re Phoenix Life Assurance Co (Howard and Dollmans Case) (1863) 1 Hem & M 433; 71 ER 189. See also Re Galland (1885) 31 Ch D 296 .4 Bolster v McCallum [1966] 2 NSWR 660; (1966) 85 WN (Pt 1) (NSW) 281 ; Bennett & Co v CLC Corp (2001) 23 WAR 344; 37 ACSR 96 ; Queanbeyan Leagues Club Ltd v Poldune Pty Ltd BC200106558; [2001] NSWSC 831 ; Re Bagomba Pastoral Co Pty Ltd BC9905658; [1999] NSWSC 902 ; Re Mason and Tylor (1878) 10 Ch D 729 ; Re Dee Estates Ltd; Wright v Dee Estates Ltd [1911] 2 Ch 85 ; Miller v Atlee (1849) 3 Exch 799; 154 ER 1068 . See also Re Shorter; Ex parte Le Febre and Kretschmann (1886) 2 WN (NSW) 106 (no lien against clients property where money owed by attorney of client under power of attorney). This does not include the costs of taxation where, at the time of taxation, the solicitor is no longer acting on behalf of the client but as an adverse party: Re Long [1929] VLR 318; [1929] ALR 271 . Compare Re Galland (1885) 31 Ch D 296 ; Re Hanbury (1896) 75 LT 449 ; Gray v Graham [1843-60] All ER Rep 609; (1855) 26 LTOS 111 , HL (general lien may extend to costs of recovering the remuneration by action).5 A lien cannot arise until costs are due: Re Birmingham (decd); Savage v Stannard [1959] Ch 523; [1958] 2 All ER 397 at 401 per Upjohn J; WFM Motors Pty Ltd v Maydwell (1994) 6 BPR 13,381; ANZ ConvR 454 ; Gilshenan & Luton v Cmr of Taxation (Cth) [1984] 1 Qd R 199; (1983) 74 FLR 398; 15 ATR 30; 83 ATC 4758 . Compare Re Jalmoon Pty Ltd [1986] 2 Qd R 264 (failure to render a bill, or the absence of taxation or agreement as to the amount of costs does not stand in the way of a lien); Margiotta v Legal Services Commissioner BC200005433; [2000] NSWSC 835 ; Loescher v Dean [1950] Ch 491; [1950] 2 All ER 124 . When the property held is trust money, the lien extends only to the part of the funds which is necessary to secure the solicitors costs already chargeable: Kirk v Cmr of Australian Federal Police (1988) 19 FCR 530; 81 ALR 321 at 347 per Davies J, Fed C of A, Full Court; Bolster v McCallum [1966] 2 NSWR 660; (1966) 85 WN (Pt 1) (NSW) 281 .6 Re Taylor, Stileman & Underwood [1891] 1 Ch 590; (1891) 60 LJ Ch 525 ; Bolster v McCallum [1966] 2 NSWR 660; (1966) 85 WN (Pt 1) (NSW) 281 at 286 per Asprey JA; Re Suttor (1890) 11 LR (NSW) L 401; 7 WN (NSW) 83.7 Re Murray [1867] WN 190; Re Carter; Carter v Carter (1885) 55 LJ Ch 230 ; Re Brockman [1909] 2 Ch 170; (1909) 78 LJ Ch 460 . As to limitation of actions for recovery of costs see [250-1010].8 Latham v Hyde (1832) 1 Cr & M 128; 149 ER 343.9 Re Trepca Mines Ltd (No 2) [1963] Ch 199 at 222 per Lord Denning MR, at 223-4 per Donovan LJ; [1962] 3 All ER 351; [1962] 3 WLR 955 , CA; Beneficial Finance Corp Ltd v Conway (No 2) [1971] VR 594 at 606-7 per McInerney J.10 Pinnock v Harrison (1838) 3 M & W 532; 150 ER 1256 .

The paragraph below is current to 24 October 2003 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [250-1040] Nature of right A retaining lien entitles a solicitor 1 to retain physical possession of a clients property that the client would otherwise be entitled to claim until the full amount of costs to which the lien relates have been paid.2 In some jurisdictions, specific provision is made to permit an order requiring the delivery up of any documents in a solicitors possession.3 Under its inherent jurisdiction, a court may order that documents subject to a retaining lien be produced in litigation where it believes this to be necessary in order to do justice in a particular case.4 Generally, a client has no right to inspect or copy documents that are the subject of a retaining lien.5 Notes 1 As to the term solicitor see [250-1] note 8.2 Re a Barrister and Solicitor (1979) 40 FLR 26 at 39 (but compare Grogan v Orr BC200104437; [2001] NSWCA 114 at [66] ); Barratt v GoughThomas [1951] Ch 242; [1950] 2 All ER 1048 at 1053 per Evershed MR; Bolster v McCallum [1966] 2 NSWR 660; (1966) 85 WN (Pt 1) (NSW) 281 at 286 ; Johns v Law Society of New South Wales [1982] 2 NSWLR 1 at 18 per Hope JA, CA(NSW). The right provided by a retaining lien is passive, it does not entitle the holder to actively enforce a demand: Barratt v Gough-Thomas [1951] Ch 242; [1950] 2 All ER 1048 at 1053 . As such, the retaining lien does not give any right to payment out of property that is the subject of a lien (Johns v Law Society of New South Wales [1982] 2 NSWLR 1 ), provide a substitute for a lack of authority to transfer money from a trust account (Re a Barrister and Solicitor (1979) 40 FLR 26 at 39) or transfer ownership of property to which the client is beneficially entitled: Johns v Law Society of New South Wales [1982] 2 NSWLR 1.3 (NSW) Legal Profession Act 1987 s 209C. Such an order may be made on any condition the court determines: ibid s 209C(1)(b). See also Conder v Silkbard Pty Ltd BC9908057; [1999] NSWCA 459 . (SA) Legal Practitioners Act 1981 s 39(1). This power may be exercised notwithstanding the existence of a lien: ibid s 39(2). Such an order may be made subject to any conditions the court thinks fit, and, in particular, on conditions protecting the rights of the legal practitioner to costs for legal work done: ibid s 39(3). (TAS) Legal Profession Act 1993 s 140(1). This power may be exercised notwithstanding the existence of a lien and subject to any conditions which the court thinks appropriate: ibid s 140(2). In making such an order, the court must take into account the rights of the legal practitioner to costs for services provided: ibid s 140(3). (VIC) Supreme Court Act 1986 s 76. The Court has jurisdiction to make orders for the delivery of a bill of costs by a legal practitioner or for the delivery of any documents in the legal practitioners possession, custody or power. There are no equivalent provisions in the other jurisdictions. 4 Storer (1993) 65 A Crim R 130 ; Re Dunstan (2000) 155 FLR 189; 112 A Crim R 63 ; Re Hawkes; Ackerman v Lockhart [1898] 2 Ch 1; [1895-99] All ER Rep 964 . Where payment of costs is secured, the court will order that the documents be delivered: Re Hanbury (1896) 75 LT 449 . Payments into court will act as security for legal costs due: Re Galland (1885) 31 Ch D 296 at 303 per Chitty J; Beneficial Finance Corp Ltd v Conway (No 2) [1971] VR 594 at 607 per McInerney J; Gebruder Naf v Ploton (1890) 25 QBD 13 . An undertaking by a lawyer that another solicitor will be paid what is due to him or her upon taxation does not constitute security: Re Castle (1867) 6 SCR (NSW) L 195 . Where documents are ordered to be produced, they

are produced to the court and not to the parties to the litigation, and whether parties to the litigation can inspect those documents and, if so, on what basis is at the discretion of the court: Bolster v McCallum [1966] 2 NSWR 660; (1966) 85 WN (Pt 1) (NSW) 281 at 287 per Asprey JA, CA(NSW); In the Marriage of Rhode (1983) 9 Fam LR 159; FLC 91-339 ; Hammerstone Pty Ltd v Lewis [1994] 2 Qd R 267 ; Woodworth v Conroy [1976] QB 884 at 891; [1976] 1 All ER 107; [1976] 2 WLR 338 per Lawton LJ, CA; Cade Pty Ltd v Thomson Simmons (No 2) (2000) 211 LSJS 49; BC200006628 .5 Re Biggs and Roche (1897) 41 Sol Jo 277. The paragraph below is current to 24 October 2003 To update legislation see ACL Legislation [250-1045] Persons against whom retaining lien available A retaining lien is generally enforceable against the client and those parties who have no higher right than the client to the property that is the subject of the lien.1 Thus, a solicitor2 cannot have the benefit of a lien in circumstances where the client would not be entitled to withhold the property against a third party.3 Where a subpoena is issued for the production of documents and the court can ensure that at the conclusion of proceedings the lien will continue unaffected, a retaining lien is no basis for resisting the subpoena.4 Documents will be required to be produced where a client is bound to do so by legislation.5 Notes 1 As such, a solicitor is entitled to enforce a retaining lien against a clients personal representatives (Re Watson (1884) 53 LJ Ch 305; 50 LT 205; 32 WR 477), a trustee in bankruptcy (Lambert v Buckmaster (1824) 2 B & C 616; 107 ER 513; Prekookeanska Plovidba v LNT Lines Srl [1988] 3 All ER 897 at 900; [1989] 1 WLR 753 per Hirst J; Re Austin; Ex parte Yalden (1876) 4 Ch D 129 ) or a liquidator, in the case of a corporate client: Re Capital Fire Insurance Assn (1883) 24 Ch D 408 ; Re Rapid Road Transit Co [1909] 1 Ch 96; (1908) 99 LT 774 ; Re Aveling Barford Ltd [1988] 3 All ER 1019; [1989] 1 WLR 360 .2 As to the term solicitor see [250-1] note 8.3 Re Hawkes; Ackerman v Lockhart [1898] 2 Ch 1 at 6-7; [1895-99] All ER Rep 964 per Lindley MR, CA; Re Aveling Barford Ltd [1988] 3 All ER 1019; [1989] 1 WLR 360 ; Andersen v Lockhart [1991] 1 Qd R 501 ; Elders Rural Finance Ltd v Tapp (1993) 113 FLR 351 ; Hollis v Claridge (1813) 4 Taunt 807; 128 ER 549; Bell v Taylor (1836) 8 Sim 216; 59 ER 87.4 Bolster v McCallum [1966] 2 NSWR 660; (1966) 85 WN (Pt 1) (NSW) 281 ; In the Marriage of Conroy (1990) 103 FLR 233; (1992) FLC 92-312 ; Hope v Liddell (1855) 7 De GM & G 331; 44 ER 129. See also Bennett & Co v CLC Corp (2001) 23 WAR 344; 37 ACSR 96 (effect of Corporations Law s 530B (repealed) in relation to solicitors lien).5 Commissioner of Taxation v Australia and New Zealand Banking Group Ltd (1979) 143 CLR 499; 23 ALR 480; 53 ALJR 336 . The paragraph below is current to 24 October 2003 [250-1050] Transfer of retaining lien A retaining lien is a transferable right and may therefore be assigned together with rights to costs1 or passed to a solicitors2 personal representatives.3 Notes 1 Magrath v Muskerry (1787) 1 Ridg Parl Rep 469; Redfearn v Sowerby (1818) 1 Swan 84; 36 ER 307; Swaby v Dickon (1848) 11 LTOS 308; Bull v Faulkner (1848) 2 De G & Sm 772; 64 ER 346 .2 As to the term solicitor see [250-1] note 8.3 Bull v Faulkner (1848) 2 De G & Sm 772; 64 ER 346 ; Redfearn v Sowerby (1818) 1 Swan 84; 36 ER 307. The paragraph below is current to 24 October 2003 For new cases see ACL Reporter

To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [250-1055] Effect of change of solicitors Where a matter is ongoing and there is a change of solicitor,1 the rights of a former solicitors retaining lien do not expire but are modified according to whether the solicitor was discharged or whether the solicitor discharged himself or herself.2 A solicitor who is discharged3 by the client otherwise than for misconduct4 maintains his or her retaining lien over the clients property until the payment of costs occurs and, as such, generally cannot be compelled to produce or hand over the property.5 A solicitor who discharges himself or herself,6 whether or not for good cause,7 generally must hand over the clients property to the new solicitor who then holds it subject to the former solicitors lien.8 The new solicitor takes the property subject to an undertaking to hold it without prejudice to the former solicitors lien, to return the property once the matter to which it relates is concluded and to allow the former solicitor access to it until that time.9 Notes 1 As to the term solicitor see [250-1] note 8.2 Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 All ER 1049; [1980] 1 WLR 614 ; McKenzie v Director-General of Conservation and Natural Resources BC200104173; [2001] VSC 220 ; In the Marriage of Bolger (1985) 82 FLR 46; 10 Fam LR 523; FLC 91-646 at 49-50 per Buckley J; Jean v Roger David Stores Pty Ltd (unreported, Fed C of A, Olney J, No VG58/96, 18 April 1997, BC9701629) at 3. See also: (ACT) Law Society of the Australian Capital Territory Professional Conduct Rules rr 7, 27, 29.2 (NSW) Law Society of New South Wales Professional Conduct and Practice Rules rr 8, 29, 31.2 (SA) Rules of Professional Conduct & Practice rr 23.3, 23.4. 3 Whether or not a solicitor is discharged by the client or discharges himself or herself is a question of fact to be determined according to the circumstances of the case: Ex parte Clowes; Re a Solicitor (1968) 87 WN (Pt 1) (NSW) 364 ; Ismail v Richards Butler (a firm) [1996] QB 711; [1996] 2 All ER 506; [1996] 3 WLR 129 . A solicitor who refuses to continue to act for a client until costs have been paid is generally taken to have discharged himself or herself: Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 All ER 1049; [1980] 1 WLR 614 ; Del Borrello v Friedman and Lurie (a firm) BC200106989; [2001] WASCA 348 ; Major Projects Pty Ltd v Sibmark Pty Ltd (unreported, SC(NSW), McLelland J, No 5798/90, 19 February 1992, BC9202071); Conquest v Maffey (1897) 22 VLR 616 .4 Hannaford v Hannaford (1871) 24 LT 86 ; Re Smith (1841) 4 Beav 309; 49 ER 358; In the Marriage of Bolger (1985) 82 FLR 46; 10 Fam LR 523; FLC 91-646 ; Hughes v Hughes [1958] P 224; [1958] 3 All ER 179 at 180; [1958] 3 WLR 300 per Hodson LJ. Compare Harrison v Lederman [1978] VR 590; (1977-78) CLC 40-379 .5 Chester v Cassidy Gibson Howlin (1994) 18 Fam LR 463; (1995) FLC 92556 ; Re Rapid Road Transit Co [1909] 1 Ch 96; (1908) 99 LT 774 ; In the Marriage of Bolger (1985) 82 FLR 46; 10 Fam LR 523; FLC 91-646 ; In the Marriage of Rhode (1983) 9 Fam LR 159; FLC 91-339 ; A v B [1984] 1 All ER 265 ; Jean v Roger David Stores Pty Ltd (unreported, Fed C of A, Olney J, VG 58 of 1996, 18 April 1997, BC9701629) ; Re Weedman (unreported, Fed C of A, Drummond J, QG88/96, 17 December 1996, BC9606375) at 5; Hughes v Hughes [1958] P 224; [1958] 3 All ER 179; [1958] 3 WLR 300 ; Robins v Goldingham (1872) LR 13 Eq 440 at 442 per Malins VC; Re Austin; Ex parte Yalden (1876) 4 Ch D 129 ; Pilcher v Arden; Re Brook (1877) 7 Ch D 318 ; Austin v Macnamara & Co (1895) 40 Sol Jo 71, CA; Lord v Wormleighton (1822) Jac 580; 37 ER 969 ; Bozon v Bolland (1839) 4 My & Cr 354; 41 ER 138 ; Re Faithfull (1868) LR 6 Eq 325. While the right of the discharged solicitor is virtually absolute, it appears that a court may, under its inherent jurisdiction, order that documents subject to a lien be handed over, subject to any conditions which the court thinks appropriate: see

Chester v Cassidy Gibson Howlin (1994) 18 Fam LR 463; (1995) FLC 92-556 (documents ordered to be handed over subject to payment of part costs and a charge being imposed over the proceeds of the litigation for the remainder of costs); A v B [1984] 1 All ER 265 (mandatory order refused where lawyers acted properly). Compare Re Weedman (unreported, SC(QLD), Drummond J, QG88/96, 17 December 1996, BC9606375) at 7-8 (it is doubtful that the court has discretion to order delivery up where the client discharges the solicitor without a good reason); Bird v Heath (1848) 6 Hare 236; 67 ER 1154; Clifford v Turrill (1848) 2 De G & Sm 1; 64 ER 1. As a solicitor has no greater right than his or her client, a solicitor who has been discharged may be required to deliver up documents for the purposes of proceedings without regard to the question of whether or not he or she was discharged or has discharged himself or herself: Simmonds v Great Eastern Railway Co (1868) LR 3 Ch App 797; Belaney v French (1873) LR 8 Ch App 918; Re Boughton; Boughton v Boughton (1883) 23 Ch D 169 ; Boden v Hensby [1892] 1 Ch 101 . As to the transfer of matters see [250-740].6 The dissolution of a firm of solicitors amounts to a discharge by the solicitors of the clients who retained the firm: Griffiths v Griffiths (1843) 2 Hare 587; 67 ER 242 ; Rawlinson v Moss (1861) 30 LJ Ch 797; 4 LT 619 ; Connolly v Standard Telephones & Cables Pty Ltd (1991) 28 FCR 581; 100 ALR 174 .7 Jankowski v Mastoris (1995) 7 BPR 14,589 at 14,593-4 per Hodgson J. As to good cause see [250-465] note 9.8 Rawlinson v Moss (1861) 30 LJ Ch 797; 4 LT 619 ; Conquest v Maffey (1897) 22 VLR 616 ; Re a Solicitor; Ex parte Clowes [1968] 3 NSWR 404; (1968) 87 WN (Pt 1) (NSW) 364 ; A v B [1984] 1 All ER 265 ; Connolly v Standard Telephones & Cables Pty Ltd (1991) 28 FCR 581; 100 ALR 174 ; Jankowski v Mastoris (1995) 7 BPR 14,589 ; Ismail v Richards Butler (a firm) [1996] QB 711; [1996] 2 All ER 506; [1996] 3 WLR 129 ; Ahmed v Russell Kennedy (a firm) BC200000911; [2000] VSC 41 .9 Heslop v Metcalfe (1837) 3 My & Cr 183; 40 ER 894 ; Robins v Goldingham (1872) LR 13 Eq 440; Conquest v Maffey (1897) 22 VLR 616 . Whether a solicitor will be required to hand over a clients property to a new solicitor is at the discretion of the court, which will be exercised having regard to the circumstances of the case: see, for example, Bluck v Lovering & Co (1886) 35 WR 232 ; Re Wontner & Sons; Ex parte Scheyer (1888) 52 JP 183; Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 All ER 1049; [1980] 1 WLR 614 , CA; A v B [1984] 1 All ER 265 ; Queanbeyan Leagues Club Ltd v Poldune Pty Ltd BC200106558; [2001] NSWSC 831 . In exceptional circumstances, the court may impose terms on the handing over of documents: Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 All ER 1049; [1980] 1 WLR 614 ; Jankowski v Mastoris (1995) 7 BPR 14,589 . The paragraph below is current to 24 October 2003 [250-1060] Priorities of successive solicitors Where more than one solicitor1 has acted in relation to a particular matter, an issue of priority may arise where there are insufficient funds to meet all claims. At common law, the general rule is that the solicitor who conducts the case to conclusion has first claim for his or her costs.2 In equity, the court may grant a solicitor employed at an earlier stage of the action an order in respect of his or her costs.3 A solicitor who receives money in respect of his or her own costs and the costs of another solicitor who has priority must pay over that solicitors costs without first deducting any amount for any set-off that he or she may be entitled to as against his or her client.4 Payment by a solicitor of another solicitors claims does not of itself create a lien in favour of the first solicitor in respect of that amount paid.5 The delivery of papers subject or without prejudice to a lien does not give the solicitor delivering the papers priority.6 To preserve a lien against a successive solicitor, an undertaking by the successor solicitor is required.7 Notes 1 As to the term solicitor see [250-1] note 8.2 Cormack v Beisly (1858) 3 De G & J 157; 44 ER 1229 ; Re Wadsworth; Rhodes v Sugden (1886) 34 Ch D 155 ; Re Knight; Knight v Gardner [1892] 2 Ch 368 . Compare Atkinson v Pengelly [1995] 3 NZLR 104 ; Re Audley Hall Cotton Spinning Co (1868) LR 6 Eq 245. See also Twigg v Keady (1996) 135 FLR 257; 21 Fam LR 82; FLC 92-712 .3 Cormack v Beisly (1858) 3 De G & J 157; 44 ER 1229 ; Re Knight; Knight v

Gardner [1892] 2 Ch 368 ; Hyde v White [1933] P 105 .4 Re Barnard; Ex parte Bailey and Hope (1851) 14 Beav 18; 51 ER 193.5 Christian v Field (1842) 2 Hare 177 at 183-4; 67 ER 74 at 77. See also Irving v Viana (1827) 2 Y & J 70; 148 ER 836.6 Batten v Wedgwood Coal and Iron Co (1884) 28 Ch D 317; 72 LT 790 .7 Re Gloucester, Aberystwyth and Central Wales Railway Co (1860) 1 LT 320; 8 WR 175; Re Audley Hall Cotton Spinning Co (1868) LR 6 Eq 245; Re Armstrong; Gibbs v Tredwell (1886) 30 Sol Jo 181, CA; Caldwell v Sumpters (a firm) [1972] 1 Ch 478 , CA. As to the effect of a change of solicitor see also [250-1055]. As to taking over matters see [250-740]. The paragraph below is current to 24 October 2003 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [250-1065] Determination of a retaining lien A retaining lien may be determined in a variety of ways. When a solicitor1 receives payment of costs in respect of which a retaining lien exists, the lien is discharged.2 Once possession of documents over which the lien is claimed is voluntarily relinquished, the general rule is that the lien will be lost.3 A lien may not be lost where possession passes for a limited and specific purpose, with the intention of maintaining the lien:4 (1) to an agent of a person subject to the lien;5 (2) to an arbitrator to enable him or her to draw up an award;6 (3) to a recipient who agrees to hold the documents subject to the lien;7 or (4) to the court when it requests the production of documents.8 A change in the character of a solicitors possession of documents, for example, from solicitor to mortgagee, may constitute a relinquishment of possession for the purposes of a lien.9 A solicitor may also determine a retaining lien by waiver where he or she conducts himself or herself in a manner inconsistent with the retention of the lien.10 A failure to comply with professional conduct rules11 may result in the discharge of a retaining lien. 12 Provision is also made in some jurisdictions for a lien to be waived following disciplinary proceedings.13 A lien is not discharged, however, by a solicitor commencing proceedings to recover costs or where a solicitor obtains a judgment for costs or a charging order.14 Notes 1 As to the term solicitor see [250-1] note 8.2 Re Emma Silver Mining Co; Re Turner (1875) 24 WR 54. The lien is not discharged simply by a solicitor obtaining judgment (Re Aikins Estate [1894] 1 IR 225) or a charging order for costs: Re Lumley (1892) 37 Sol Jo 83. As to charging orders see [250-1090].3 Caldwell v Sumpters (a firm) [1972] 1 Ch 478 , CA.4 Re Ly; Ex parte

Dixon v Ly (1995) 62 FCR 432 .5 Watson v Lyon (1855) 7 De GM & G 288; 44 ER 113 .6 Whalley v Halley (1829) 8 LJOS 6.7 Caldwell v Sumpters (a firm) [1972] 1 Ch 478 ; Harrison v Lederman [1978] VR 590 at 592; (1977-78) CLC 40-379 per Gillard J.8 Re Till; Ex parte Parsons (1871) 19 WR 325 . See also [250-1045] note 5.9 Barratt v Gough-Thomas [1951] Ch 242; [1950] 2 All ER 1048 . As to change of solicitor see [250-1055].10 Re Morris [1908] 1 KB 473 at 477 per Buckley LJ, CA (taking security over property to which deeds relate); Re Muller [1993] 1 Qd R 405 (failure to render bill of costs within prescribed period); Robarts v Jefferys (1830) 8 LJOS 137 (taking of promissory note); Cowell v Simpson (1809) 16 Ves 275; 34 ER 1170. Compare Harrison v Lederman [1978] VR 590; (1977-78) CLC 40-379 (failure to render bill of costs within prescribed period in accordance with professional conduct rules). A lien may also be lost and deemed to have been surrendered by election where proof of a debt in bankruptcy occurs without the liens mention or valuation of the lien: Re International Tyre Co Pty Ltd (in liq) (1979) 4 ACLR 553 , SC(QLD). However, a court may allow a proof to be withdrawn where the omission is inadvertent: Re Safety Explosives Ltd [1904] 1 Ch 226 ). The presumption is that the lien will be abandoned unless the solicitor can show that he or she intended that it be expressly reserved: Re Taylor, Stileman & Underwood [1891] 1 Ch 590; (1891) 60 LJ Ch 525 , CA.11 As to professional conduct rules see [250-5] notes 4, 7.12 Re Wheldon & Associates (unreported, SC(QLD), Thomas J, No 591/91, 5 July 1991, BC9102540). Compare Harrison v Lederman [1978] VR 590; (1977-78) CLC 40-379 .13 (ACT) Legal Practitioners Act 1970 s 58(2) (NSW) Legal Profession Act 1987 ss 152(2), 171D(1) (QLD) Queensland Law Society Act 1952 s 6R(1)(h) (TAS) Legal Profession Act 1993 ss 61(2), 76(1)(s) (VIC) Legal Practice Act 1996 s 133(1)(e). There are no equivalent provisions in the other jurisdictions. See generally [250-1160]-[2501405]. 14 Re Aikins Estate [1894] 1 IR 225; Re Lumley (1892) 37 Sol Jo 83.

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(E) Merger The paragraph below is current to 20 May 2010 [295-8405] Nature of merger The creation of a mortgage involves the transfer or creation of an estate or interest in property by the mortgagor in favour of the mortgagee.1 The concept of a merger arises in two instances:2 (1) Merger of estates. Whenever a party to a mortgage acquires an estate or interest in the secured property that had been held by the other party to the mortgage, then the possibility arises for the merger of the estate or interests into one estate or interest. (2) Merger of a charge. In the case of successive mortgages,3 where a mortgagee or a mortgagor acquires an estate or interest in the property held by another mortgagee, then the possibility of the merger of the estate or interests of these respective parties arises. A feature of both types of merger is that a partys equitable interest in secured property is not necessarily extinguished when that party acquires another partys legal interest in the property and vice versa.4 For a merger to take place, it is sufficient that the beneficial interest in the charge and the beneficial estate in the land meet in the same person whether, in either case, they are accompanied by the legal interest or estate or not.5 Notes 1 As to mortgages over general law land see [295-2000]-[295-2100]. As to mortgages over Torrens title land see [295-2500]-[295-2590].2 As to merger in equity generally see equity [1851140].3 As to successive mortgagees in land see [295-8195], [295-8200].4 See [295-8410].5 Forbes v Moffatt (1811) 18 Ves 384; 34 ER 362 at 364 . This principle is encapsulated in the expression merger does not necessarily follow in equity: see Sykes E & Walker S, The Law of Securities, 5th ed, Law Book Co, Sydney, 1993, p 86-9. The paragraph below is current to 20 May 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [295-8410] Equitable rule In general, whether a merger of charges or a merger of estates arises, is a question of ascertaining the intention of the party acquiring the relevant interest.1 The operation of this principle requires a consideration of the actual intention of the party and, in the absence of evidence of actual intention, it is presumed that an intention to keep the security alive exists where this is for the benefit of the party.2 This principle is known as the equitable rule and

has been accorded statutory recognition in all jurisdictions.3 The principle has been held to apply where a party to a Torrens title mortgage acquires the estate or interest of another party with an interest in the secured property.4 In general, even though a security has been extinguished, it may be treated as still in existence for the protection of the person finding the money to pay it off.5 Where the mortgage has been extinguished under a misapprehension of title, it may be treated as still being in existence if this more closely accords with the general intention of the owner.6 Notes 1 Robertson v Fink [1906] VLR 554 (reversed on other grounds Fink v Robertson (1907) 4 CLR 864; [1907] VLR 610; (1907) 13 ALR 157 ); R v Registrar of Titles; Ex parte Watson [1952] VLR 470; [1952] ALR 909 ; Lewis v Keene (1936) 36 SR (NSW) 493; 53 WN (NSW) 177 ; English, Scottish and Australian Bank Ltd v Phillips (1937) 57 CLR 302 at 310; 10 ALJ 458; [1937] ALR 104 per Latham CJ; Shell Co of Australia Ltd v Zanelli [1973] 1 NSWLR 216 at 220-1 ; Finance Corp of Australia Ltd v Cmr of Stamp Duties [1981] Qd R 493 at 506-7 per Matthews J, at 509-10 per Macrossan J . For the meaning of merger of charges and merger of estates see [295-8405].2 See [295-8420].3 (ACT) Civil Law (Property) Act 2006 s 206 (NT) Law of Property Act 2000 s 16 (NSW) Conveyancing Act 1919 s 10 (QLD) Property Law Act 1974 s 17 (SA) Law of Property Act 1936 s 13 (TAS) Supreme Court Civil Procedure Act 1932 s 11(4) (VIC) Property Law Act 1958 s 185 (WA) Property Law Act 1969 s 18. 4 Robertson v Fink [1906] VLR 554 (reversed on other grounds Fink v Robertson (1907) 4 CLR 864; [1907] VLR 610; (1907) 13 ALR 157 ); R v Registrar of Titles; Ex parte Watson [1952] VLR 470; [1952] ALR 909 ; Lewis v Keene (1936) 36 SR (NSW) 493; 53 WN (NSW) 177 . Compare English, Scottish and Australian Bank Ltd v Phillips (1937) 57 CLR 302 at 322-4; 10 ALJ 458; [1937] ALR 104 per Dixon, Evatt and McTiernan JJ; Shell Co of Australia Ltd v Zanelli [1973] 1 NSWLR 216 .5 Lord Gifford v Lord Fitzhardinge [1899] 2 Ch 32 .6 Earl of Buckinghamshire v Hobart (1818) 3 Swan 186; 36 ER 824. The paragraph below is current to 20 May 2010 [295-8415] Exception There is an important exception, known as the rule in Otter v Vaux, to the equitable rule.1 Where the mortgagor or a subsequent mortgagee2 pays off a security which the mortgagor is personally liable to pay, the mortgagor or subsequent mortgagee is not allowed to rely upon the security as against subsequent mortgagees to whom the mortgagor is liable.3 This rule is based on the equities that arise from a defined contractual relationship, where it would be unconscionable for a mortgagor to pay out a first mortgage and then attempt to rely on this newly bare security to escape from the burden of subsequent mortgages.4 This exception has been applied to Torrens title mortgages both before the transfer, under which the mortgagor acquired title upon exercise of a power of sale, has been registered5 and afterwards.6 One application of this exception is where a co-mortgagor pays off a mortgage, in which circumstances the mortgage is not kept alive.7 Another is where a guarantor of a second

mortgage pays off the first mortgage and is not subrogated to the first mortgagee.8 Notes 1 As to the equitable rule see [295-8410].2 Edwards v McDowell (1933) 50 WN (NSW) 244 .3 Otter v Lord Vaux (1856) 6 De GM & G 638; 43 ER 1381 .4 Sussman v AGC Advances Ltd (1995) 37 NSWLR 37; (1996) 7 BPR 14,312; (1996) ANZ ConvR 309; (1995) NSW ConvR 55752 .5 R v Registrar of Titles; Ex parte Watson [1952] VLR 470; [1952] ALR 909 .6 Sussman v AGC Advances Ltd (1995) 37 NSWLR 37; (1996) 7 BPR 14,312; (1996) ANZ ConvR 309; (1995) NSW ConvR 55-752 .7 Cochrane v Cochrane (1985) 3 NSWLR 403 at 405 .8 Bofinger v Kingsway Group Pty Ltd (2008) 73 NSWLR 437; 14 BPR 26,167; [2008] NSWCA 332; BC200810812 . The paragraph below is current to 20 May 2010 [295-8420] Presumptions Where there is no evidence of any actual intention, 1 an intention to keep the security alive, notwithstanding that it would prima facie merge, may be presumed where this is for the benefit of the owner.2 The result is in fact based directly on the advantage to the acquirer. Technically it is based on the presumed intention of the acquirer of the relevant estate or interest.3 The fact that the owner of the estate is ignorant of this principle may operate to prevent a finding of actual intention as to merger. However, the presumed intention may still operate either to effect or to prevent merger.4 Notes 1 As to ascertaining the actual intention see [295-8435].2 Swinfen v Swinfen (No 3) (1860) 29 Beav 199; 54 ER 603.3 Grice v Shaw (1852) 10 Hare 76; 68 ER 845.4 Burrell v Earl of Egremont (1844) 7 Beav 205; 49 ER 1043 at 1054. Compare Whiteley v Delaney [1914] AC 132 at 145-7 per Viscount Haldane LC, at 151-2 per Lord Dunedin; (1913) 110 LT 434 . The paragraph below is current to 20 May 2010 [295-8425] Presumption in favour of merger In the absence of evidence of intention, 1 the equitable rule,2 presuming that the acquirer of an estate or interest in secured property will intend to benefit themselves, results in a presumption in favour of a merger arising when the holder of an absolute interest in a security (for example, a mortgagee who holds the legal estate in land) with possession is united with the estate in fee simple in the land.3 There is no advantage in keeping the security alive as the extinguishment by merger simplifies the title to the land. The presumption in favour of a merger arises in these cases not only where the security and estate devolve upon the same person, but also where the owner of the estate purchases4 or pays off the security. 5 Accordingly, prima facie where an existing mortgagee purchases the interest of the mortgagor or where the mortgagees interest and the interest of the mortgagor become united by purchase in the same person, the mortgage may be merged in the land.6 However, where there are successive mortgagees then it would be to the advantage of the purchaser of the interest of the mortgagor to preserve the mortgage. The purchaser is entitled to keep the mortgage alive as against subsequent encumbrances by an actual intention to that effect, and such an intention can be proved, as in other cases, either by express declaration or from the circumstances of the transaction.7 Notes 1 See [295-8420]. As to ascertaining intention see further [295-8435].2 As to the equitable rule of presumption of acquirers intentions see [295-8410].3 Donisthorpe v Porter (1762) 2 Eden 162; 28 ER 858; Ware v Polhill (1805) 11 Ves 257; 32 ER 1087 at 1095.4 Astley v Milles (1827) 1 Sim 298; 57 ER 588.5 Earl of Buckinghamshire v Hobart (1818) 3 Swan 186; 36 ER 824 at 829.6

Smith v Phillips (1837) 1 Keen 694; 48 ER 474 .7 Croaker v Bank of New South Wales (1889) 10 LR (NSW) Eq 195; 6 WN (NSW) 53 ; Re H $ S Credits Ltd (in liq); Tucker v Roberts [1969] Qd R 280 ; Whiteley v Delaney [1914] AC 132; (1913) 110 LT 434 . It may be that the presumption against merger will apply, although compare Toulmin v Steere (1817) 3 Mer 210; 36 ER 81 (suggesting that evidence of actual intention against merger is required: Sykes E & Walker S, The Law of Securities, 5th ed, Law Book Co, Sydney, 1993, p 88). The paragraph below is current to 20 May 2010 [295-8430] Presumption against merger In the absence of evidence of intention, 1 the equitable rule2 presuming that the acquirer of an estate or interest in secured property will intend to benefit themselves, results in a presumption against merger where the holder of a limited interest, for example a tenant, acquires or pays off a security.3 Otherwise, the merger would operate as a gift to those in the remainder who would acquire the property free from the security. As a result of the equitable rule, a presumption against merger applies where the security is subject to limitations which prevent the full union of the security and the estate in the lifetime of the owner; for example, where the security is subject to a prior life interest which does not terminate during the life of the owner in fee simple.4 Where a security becomes vested in an owner whose interest is in remainder and may never fall into possession there is a presumption against merger so long as the interest continues in remainder. The person with a remainder interest may never enjoy possession and is presumed not to release the security.5 However, when a person whose interest is in the remainder falls into possession, reference is made to the intention, expressed or presumed, at the time of acquiring the charge. In the absence of any indication to the contrary, the relevant intention is presumed to continue at the moment when merger might take place. If the charge was acquired by actual payment, the presumption is against a merger, as an owner in remainder, whose interest may never fall into possession, cannot be supposed to intend to benefit the inheritance. However, if the charge was acquired otherwise, the presumption in favour of a merger arises, and when the interest falls into possession the charge is merged.6 Notes 1 See [295-8420]. As to ascertaining intention see [295-8435].2 As to the equitable rule of presumption of acquirers intentions see [295-8410].3 Williams v Williams-Wynn (1915) 84 LJ Ch 801; 113 LT 849. This presumption against merger has been held to exist notwithstanding that the reconveyance to the tenant for life was expressed to be absolutely discharged from the mortgage debt: Lord Gifford v Lord Fitzhardinge [1899] 2 Ch 32 .4 Wilkes v Collin (1869) LR 8 Eq 338.5 Horton v Smith (1858) 4 K & J 624; 70 ER 259; Re Chesters; Wittingham v Chesters [1935] Ch 77; [1934] All ER Rep 319 .6 Horton v Smith (1858) 4 K & J 624; 70 ER 259; Re Chesters; Wittingham v Chesters [1935] Ch 77; [1934] All ER Rep 319 . The paragraph below is current to 20 May 2010 [295-8435] Ascertaining actual intention The rules as to the presumption in favour of or against merger yield to the actual intention of the person acquiring the relevant estate or interest.1 The intention is to be gathered either from express declaration or from the persons acts.2 The clearest way of causing or preventing merger is by express declaration in the instrument which effects the union of the charge and the estate.3 Even an express declaration against merger does not, however, keep the charge alive if there are circumstances pointing conclusively to merger.4 Where there is no express declaration, an actual intention can be inferred from the circumstances attending the acquisition of the relevant interest. The contemporaneous transfer of the security to a trustee is one of the grounds on which an actual intention against merger can be inferred,5 but by itself it is not decisive against merger.6 Notes

1 Grice v Shaw (1852) 10 Hare 76; 68 ER 845.2 Tyrwhitt v Tyrwhitt (1863) 32 Beav 244; 55 ER 96.3 Re Gibbon; Moore v Gibbon [1909] 1 Ch 367; (1908) 78 LJ Ch 264; 100 LT 231 .4 Re Gibbon; Moore v Gibbon [1909] 1 Ch 367 at 373; (1908) 78 LJ Ch 264; 100 LT 231 .5 Earl of Buckinghamshire v Hobart (1818) 3 Swan 186; 36 ER 824.6 Hood v Phillips (1841) 3 Beav 513; 49 ER 202 . The paragraph below is current to 20 May 2010 [295-8440] Intention and subsequent events Merger is prevented by any acts done by the owner which are only consistent with the security being kept on foot.1 Merger is effected where the owner has disposed of property free from encumbrances, whether by sale or mortgage.2 In such cases, the security cannot be set up notwithstanding a clear expression of intention to keep it alive at the time of acquisition.3 Where the acquisition takes place otherwise than by the intended acquisition of the charge or estate, or payment of the charge, so that no indications of intention can exist at the time of acquisition, it is permissible to rely on any such indications occurring subsequently during the lifetime of the owner.4 However, it is not permissible to rely upon expressions of intention previous to the acquisition of the interests.5 Notes 1 Tyrwhitt v Tyrwhitt (1863) 32 Beav 244; 55 ER 96; Re Fletcher; Reading v Fletcher [1917] 1 Ch 339; [1916-17] All ER Rep Ext 1257 .2 Re Gibbon; Moore v Gibbon [1909] 1 Ch 367; (1908) 78 LJ Ch 264; 100 LT 231 .3 Countess Gower v Earl Gower (1783) 1 Cox, Eq Cas 53; 29 ER 1059.4 Re Godleys Estate [1896] 1 IR 45. This view must be read subject to the views in FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343; (1993) Aust Contract Reports 90-025 concerning the use of subsequent conduct in the interpretation of contracts.5 Tyrwhitt v Tyrwhitt (1863) 32 Beav 244; 55 ER 96 at 99. The paragraph below is current to 20 May 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [295-8445] Effect of judgment The obtaining of a judgment by the mortgagee for the mortgage debt does not, while the judgment remains unsatisfied, prevent the mortgagee from enforcing the security.1 In South Australia and Victoria, the release from judgment of part of the land mortgaged does not affect the rights in relation to the remainder of the land.2 A judgment on a debt secured by equitable mortgage does not deprive that mortgage of its efficacy, notwithstanding that the judgment operates as a charge on the land.3 Notes 1 Re Jennings Estate (1885) 15 LR Ir 277.2 (SA) Law of Property Act 1936 s 39 (VIC) Transfer of Land Act 1958 s 71. 3 Re Jennings Estate (1885) 15 LR Ir 277. The paragraph below is current to 20 May 2010 [295-8450] Effect of legal mortgage on equitable security An equitable mortgage created by deposit of deeds1 is extinguished by the taking of a formal mortgage. This follows even though the mortgage does not confer a legal estate and the sum secured by the formal mortgage varies from the sum secured by the deposit.2

Notes 1 As to equitable mortgages over general law land see [295-2015]. As to equitable mortgages over Torrens title land see [295-2505], [295-2510]. As to equitable mortgages over chattels see [295-4560].2 Vaughan v Vanderstegen (1854) 2 Drew 289; 61 ER 730. The paragraph below is current to 20 May 2010 [295-8455] Merger must not be opposed to the contract A security will not be merged if the merger would be opposed to the contract between the parties.1 For example, a mortgage is not merged by the taking of a fresh mortgage on the same property to cover the original debt and further advances.2 Notes 1 Twopenny v Young (1824) 3 B & C 208 at 245-6; [1824-34] All ER Rep 273; (1824) 107 ER 711; Boaler v Mayor (1865) 19 CBNS 76; 144 ER 714.2 General Credits (Finance) Pty Ltd v Brushford Pty Ltd [1975] 2 NSWLR 786 ; Bank of Victoria v Looker (1896) 21 VLR 704 . The paragraph below is current to 20 May 2010 [295-8460] Nature of waiver, election and estoppel A debt that is the subject of security may be varied or extinguished as a result of an express or implied release or as a result of the operation of the principles of waiver, election or estoppel.1 The rights of the creditor to enforce the security may be affected if the debt has been extinguished. Similarly, the rights of the creditor under a security for the debt may be varied or extinguished as a result of an express or implied discharge of the security or as a result of the operation of the principles of waiver, election or estoppel. If the waiver, election or estoppel is clearly limited to part of the security, the mortgagees rights over the remainder of the security is unaffected.2 If the waiver, election or estoppel is on the face of it clearly of general application, it is not restricted on the representation of one of the parties that a more limited application was intended.3 Notes 1 See contract [110-900]-[110-915], [110-9425]-[100-9495] and estoppel.2 Greenwood v Taylor (1845) 14 Sim 505; 60 ER 454 (mortgagee surrendered legal interest in a leasehold security to enable mortgagor to provide another security, but stipulated that the surrender was without prejudice to any other security the mortgagee might have for the debt; mortgagee held to be still entitled to the benefit of certain covenants in the mortgage not being within the operation of the surrender).3 Drought v Jones (1840) 4 Dr & War 174. The paragraph below is current to 20 May 2010 [295-8465] Taking substituted security It may be contended that the benefit of a security has been released by the operation of waiver, election or estoppel as a result of the acceptance of another security in its place. In this case, the mortgagor of the original estate must establish that the original security was discharged by the taking of the new security.1 There is no onus on the creditor to disprove the substitution of the new security for the old.2 Notes 1 Saunders v Leslie (1814) 2 Ball & B 509.2 Saunders v Leslie (1814) 2 Ball & B 509.

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[life interest] (33) View search details Search Terms Search Details You searched for: COMMENTARY(life interest)

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(4) SOCIAL SECURITY AND RELIEF PAYMENTS

This chapter was updated by Anita Sekar BEc LLB(Hons)(Syd) Solicitor of the Supreme Court of New South Wales

(A) Retirement Assistance for Farmers Scheme The paragraph below is current to 28 September 2009 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [330-11080] General The Retirement Assistance for Farmers Scheme (the RAFS) allows a farmer who is of pension age1 to transfer by way of gift to one or more eligible descendants 2 his or her interest in the farm or farms3 without affecting his or her ability to claim the aged pension.4 The transfer must be made by a qualifying farmer,5 his or her partner6 or a former partner of a qualifying farmer7 and the asset transfer must: (1)

be made after 14 September 1992 but before 1 July 2001;8 (2) be a transfer of the farmers qualifying interest in the farm and all qualifying interests in relevant farm assets;9 and (3) not exceed $500,000 in total value.10 If the person transferring the farm is a member of a couple, that persons partner must not have a legal estate or interest in the farm to be transferred or any other farm, nor have a legal interest in any relevant farm asset.11 The farmer must also satisfy the farmers income test.12 The test requires that the persons total income for the last three financial years before the day on which the transfer was completed does not exceed three times the maximum basic rate for the age pension.13 If the person is a member of a couple the persons partners income is also included in the calculation.14 An important aspect of the scheme is still available even where a farmer retains an interest in a dwelling house on the farm and adjacent land.15 The scheme also applies to veterans.16 Notes 1 (CTH) Social Security Act 1991 s 1185B(1)(b)(i). The pension age for men is 65 years of age: see ibid s 23(5A) Table. The pension age for women varies depending on the year of birth. Generally, it is between 60 years (ibid s 23(5B)) and 65 years (ibid s 23(5D) Table; ibid s 23(5C) Table). The scheme also applies to farmers who will reach pension age before 15 September 2000: ibid s 1185B(1)(b)(ii). As to age pensions see social security [380-4215]-[380-4220]. 2 Ibid s 1185B(1)(a). Eligible descendant means: (1) a child, step child or adopted child of the person or a partner of the person; (2) a descendant in direct line of a child in list item (1) above; or (3) any other person who in the opinion of the Secretary should be treated as a person described in list item (1) or (2) above: ibid s 17A(1). An eligible descendant must also have been actively involved in the farm or farms during the three years prior to the transfer or would, in the opinion of the Secretary, have been involved but for exceptional circumstances beyond his or her control: ibid s 1185B(1)(d). An eligible descendant is taken to have been actively involved with a farm if the person has:

(1) contributed a significant part of his or her labour to the development of the farm; or (2) undertaken educational studies or training in a field that, in the opinion of the Secretary, is relevant to the development or management of the farm enterprise: ibid s 1185B(5). 3 A farm means any land used for the purposes of a farm enterprise or in connection with a farm enterprise: ibid s 17A(1). A farm enterprise means an enterprise carried on within any of the agricultural, horticultural, pastoral or aquacultural industries: ibid s 17A(1).4 Ibid s 1185A. If all requirements of the scheme are met the value of the assets transferred is not a disposal of an asset within the meaning of ibid s 1123 and therefore will not affect the assets test in ibid s 1123(1): ibid s 1185D(1).5 Ibid s 1185B(1). A person is a qualifying farmer if the person has: (1) continuously had for a period of at least 15 years a qualifying interest in a farm; and (2) during a period of 15 years that person or the persons partner (a) contributed a significant amount of labour and capital to the development of the farm or farms, and (b) derived a significant part of his or her income from those farms: ibid s 17A(3). Alternatively a person is also a qualifying farmer if the person: (1) has a qualifying interest in one or more than one farm; (2) the qualifying interest was acquired by the person before 15 September 1997; and (3) the person or the persons partner or former partner has been involved in farming in Australia for a continuous period of 20 years or periods that together add up to 20 years by (a) contributing a significant part of his or her labour to farm enterprises, and (b) deriving a significant part of his or her income from farm enterprises: ibid s 17A(4). For the meaning of farm enterprise see note 3 above. A person has a qualifying interest in a farm if the person has:

(1) a legal estate or interest in the farm; (2) a transferable legal right or transferable licence to occupy the farm for a particular purpose of the farm enterprise; (3) an equitable estate or interest in the farm as the mortgagor of a legal estate or interest in the farm (being an estate or interest that is not registered under a relevant State land law); or (4) a shareholding in a proprietary company that has a legal estate or interest in the farm: ibid s 17A(5). 6 If the transfer is made by the farmers partner, the farmer must have been involved in farming for a continuous period of 20 years or for periods which add up to 20 years: ibid s 17A(4). See the definition of qualifying farmer in note 5 above.7 Ibid s 1185B(2). A person is an eligible former partner of a qualifying farmer if that person was the partner of a qualifying farmer on the day the relationship ceased (because of death or any other reason) and the person has not again become a member of a couple: ibid s 17A(2). The person must also have a qualifying interest in a farm or farms in which their former partner had an interest: ibid s 17A(2)(d).8 Ibid ss 1185AA, 1185B(1)(a).9 Ibid s 1185B(1)(a)(i), 1185B(1)(a)(ii). For the definition of qualifying interest see note 5 above. A person has a qualifying interest in a relevant farm asset if the person has a legal interest in the asset or is a shareholder in a proprietary company that has a legal estate or interest in the farm asset: ibid s 17A(6). A relevant farm asset means any livestock, crop, plant or equipment that is a produce of or used for the purposes of the farm enterprise: ibid s 17A(1).10 Ibid s 1185B(1)(c).11 Ibid s 1185B(1)(e).12 Ibid s 1185B(1)(f).13 Ibid s 1185K. A method statement for the test is contained in ibid s 1185K(1). The maximum basic rate for age pension applicable to the person is calculated by reference to ibid s 1064 Module B of Pension Rate Calculator A: ibid s 1185K(4).14 Ibid s 1185K(1) Steps 1 and 2.15 Ibid s 1185C(2). If, when transferring by way of gift to another person his or her qualifying interest in a farm, a person retains a freehold, leasehold or life interest in the dwelling house on the farm, and any adjacent land used primarily for private or domestic purposes, then: (1) the person is taken to have transferred the whole of his or her qualifying interest in the farm by way of gift; and (2) when assessing the value of the farm, the value of the dwelling house and any adjacent area of land used primarily for private and domestic purpose in association with that dwelling-house will not be included: ibid s 1185C(2). 16 See (CTH) Veterans Entitlements Act 1986 Pt IIIB Div 8 Retirement Assistance for Farmers.

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(C) Life Estates The paragraph below is current to 25 September 2008 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [355-110] Life estate The smallest estate of freehold recognised by the common law is the life estate.1 A life estate is an estate which entitles the holder to possession of land for the lifetime of the grantee2 or the life of another person (as an estate pur autre vie). 3 In the case of an estate pur autre vie, the person whose life determines the duration of the estate is known as the cestui que vie and the interest holder in possession was known as the tenant pur autre vie or tenant for life or lives. The cestui que vie, as the measuring life of the estate has no interest in the land unless otherwise granted an interest.4 An ordinary life estate is not an estate of inheritance (a fee),5 although in the case of an estate pur autre vie, statutory reform has modified this position. The right was always alienable, but only for the duration of the life of the cestui que vie.6 Where the tenant for life or lives predeceases the cestui que vie, the estate of the tenant for life or lives may leave the interest by will7 or if he or she dies intestate, the interest forms part of the intestates estate.8 In the Northern Territory and Queensland, if a tenant for life or lives, or a person who is in or comes into possession of land by, from or under the tenant or by collusion with the tenant, wilfully holds over any land after: (1)

termination of the tenancy; and (2) demand has been made and written notice given by the person to whom the remainder or reversion of the land belongs or the persons agent lawfully authorised for the delivery of possession of the land, the person holding over is liable to pay to the person kept out of possession of the land rent at the rate of double the market rent for the land detained for and during the time the person holds over or keeps the person entitled out of possession.9 Notes 1 See Butt P, Land Law, 4th ed, Lawbook Co, Sydney, 2001, [1001]; MacDonald C, McCrimmon L and Wallace A, Real Property Law in Queensland, LBC Information Services, Sydney, 1998, p 157.2 As to an ordinary life estate see [355-2070].3 As to an estate pur autre vie see Holdsworth W A, A History of English Law, 2nd ed, Vol II, Sweet & Maxwell, London, 1937, p 120. See also [355-2090]. The estate pur autre vie has been abolished in the Australian Capital Territory: (ACT) Law Reform (Abolitions and Repeals) Act 1996 (repealed) s 3.4 See Butt P, Land Law, 4th ed, Lawbook Co, Sydney, 2001, [1005].5 See Bradbrook A J, MacCallum S V and Moore A P, Australian Real Property Law, 2nd ed, LBC Information Services, Sydney, 1997, [2.24], MacDonald C, McCrimmon L and Wallace A, Real Property Law in Queensland, LBC Information Services, Sydney, 1998, p 157.6 See Utty Dales Case (1590) Cro Eliz 182; 78 ER 439. See also Co Litt 41b.7 Originally the right to devise an estate pur autre vie was granted in the (IMP) Statute of Frauds 1677 s 12. Now, in all jurisdictions, a testator is able to devise all his or her real property: see succession [395-1060]. Specific mention of an interest in an estate pur autre vie as a devisable interest in property is made in: (ACT) Wills Act 1968 s 7(2)(b) (NSW) Succession Act 2006 s 4 (SA) Wills Act 1936 s 4(2) (TAS) Wills Act 1992 s 5(2). The wording of the statutes in the other jurisdictions is broad enough to include an interest in an estate pur autre vie see: (NT) Wills Act 2000 s 6 (QLD) Succession Act 1981 s 8 (VIC) Wills Act 1997 s 4 (WA) Wills Act 1970 s 6. 8 See [355-2090]. As to intestacy see succession [395-840]-[395-2095].9 (NT) Law of Property Act 2000 s 27 (QLD) Property Law Act 1974 ss 26, 27. The paragraph below is current to 25 September 2008 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes

Annotations [355-115] Dower and curtesy Two forms of life estate were created by operation of law: curtesy and dower. Curtesy1 was the right of a husband to an estate for his life, expectant on the death of his wife, in the entirety2 of land and hereditaments of the wife, excluding joint tenancies, life estates and estates pur autre vie, subject to his having had issue by her born alive who were capable of inheriting the property from her.3 For a husband to be entitled to curtsey, it was necessary for the wife to be in seisin of the land.4 Dower was the right of a wife to a life estate in one-third of the lands of her husband after his death, to provide the sustenance of herself and her children and their education and upbringing.5 The conditions necessary for dower to be granted were that:6 (1) the husbands estate in the land must have been capable of inheritance, and as such excluded joint tenancies, life estates, and estates pur autre vie; (2) the estate was vested in possession during the husbands life; (3) it was possible that a child of the marriage capable of inheriting the land could be born (whether or not this actually happened); and (4) dower had not been barred by a device such as a use to bar dower. Dower applied to land which the husband had alienated during his lifetime or by his will. As this greatly reduced the alienability of land, dower was not recognised in equity; therefore, it was not possible to claim dower out of an equitable estate.7 Statutory enactments in the early nineteenth century allowed dower out of equitable estates and barred dower in respect of alienated lands.8 Curtesy and dower have been abolished in all Australian jurisdictions.9 Notes 1 As to an estate by the curtesy of England see Butt P, Land Law, 4th ed, Lawbook Co, Sydney, 2001, [1014]-[1017].2 This included the legal and equitable interests of the wife because curtesy was always allowed in equitable estates however, the husband was not allowed curtesy in an equitable estate or interest contrary to the express provisions of the trust (Bennet v Davis (1725) 2 P Wms 316; 24 ER 746), or to the clear intention of the settlor: see Steadman v Palling (1746) 3 Atk 423; 26 ER 1044.3 Littletons Tenures ss 35, 52; Blackstone, Sir W, Commentaries on the Laws of England, Vol 2, Clarendon Press, Oxford, 1765-69, p 127; Halsburys Laws of England, 4th ed, Vol 39(2) Reissue, para 157. See also Paines Case (1587) 8 Co Rep 34a; 77 ER 524; Steadman v Palling (1746) 3 Atk 423; 26 ER 1044; Basset v Basset (1744) 3 Atk 203 at 207; 26 ER 918; Goodtitle d Newman v Newman (1774) 3 Wils 516; 95 ER 1188.4 Co Litt 29a. It was not sufficient to obtain judgment in an action for the recovery of the land, if execution was stayed and the defendant remained in possession until the death of the wife: Parks v Hegan [1903] 2 IR 643. As to seisin see [355-85].5 Jones v Jones (1832) 2 Cr & J 601; 149 ER 253. See also Blackstone, Sir W, Commentaries on the Laws of England, Vol 2, Clarendon Press, Oxford, 1765-69, p 131; Littletons Tenures ss 36-53; Halsburys Laws of England, 4th ed, Vol 39(2)

Reissue, para 161; Butt P, Land Law, 4th ed, Lawbook Co, Sydney, 2001, [1009]-[1013].6 See Marshall v Smith (1907) 4 CLR 1617 at 1625 per Barton J, at 1638 per Isaacs J; 14 ALR 158; [1907] HCA 33; BC0700019 .7 Thus the practice of conveyancing land to uses were used to bar dower. See, for example, Carr v Houison (1871) 10 SCR (NSW) Eq 107.8 See, for example, (NSW) Dower Act 1837 (repealed).9 (ACT) Administration and Probate Act 1929 s 48 (NT) Administration and Probate Act 1969s 65 (NSW) Conveyancing Act 1919 s 21 (dower); (NSW) Probate and Administration Act 1898 s 52 (dower and curtesy) (QLD) Intestacy Act 1877 (repealed) s 28. The repeal of this Act does not revive the interests: (QLD) Acts Interpretation Act 1954 s 20A (SA) Administration and Probate Act 1919 s 46 (TAS) Conveyancing and Law of Property Act 1884 s 89 (dower and curtesy) (VIC) Real Property Act 1855 (repealed) s 51 (dower) (WA) Administration Act 1903 s 16. See also Marshall v Smith (1907) 4 CLR 1617; 14 ALR 158; [1907] HCA 33; BC0700019 (dismissing possibility of revival of dower when (NSW) Dower Abolition Act 1837 was repealed by a consolidating act which was read as having the legislative intention of leaving the law as it stood at the time when the repealing enactment was passed). The paragraph below is current to 25 September 2008 [355-120] Rights and liabilities of life tenants Life tenants are entitled to the full enjoyment of the estate including the right to possession (seisin) and may take annual profits from the estate, called emblements and a number of different rights over timber.1 Domestic, ornamental or trade fixtures which the life tenant has brought on to the estate may also be removed at the end of the tenancy.2 The tenant may also dispose of the estate, however the donee or purchaser will only take an estate for the length of the relevant life (an estate pur autre vie).3 The tenant however has a duty of leaving the estate unimpaired for the remainderman which is defined as the doctrine of waste.4 Notes 1 See [355-2100].2 See [355-2105].3 As to the meaning of estate pur autre vie see [355-110].4 See [355-125]. The paragraph below is current to 25 September 2008 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [355-125] Waste Life tenants are restricted in the way they may treat the land the subject of the tenancy under the common law doctrine of waste.1 Waste is a tortious 2 act3 or omission4 which, without consent,5 permanently alters the nature of the land in possession to the prejudice of the holder of the reversionary or remaindered interest.6 As the action of waste is founded in tort, it is independent of contract or implied covenants and therefore it is not excluded from the lease even if there is an express covenant in the instrument creating the interest dealing with the same matter.7 Waste will not have been committed if the acts are a breach of contract rather than

tortious.8 Waste will not have been committed if either the reversionary or remaindered interest holder agrees to the act, or the act is done pursuant to a statutory imperative.9 In general, an act will not be characterised as waste where it improves the demised premises or the damage is trivial.10 A category of waste regarded as wrongful in equity may arise where a person has a legal right to commit waste, but exercises that right in an unconscientious manner.11 In place of the common law, in the Northern Territory, New South Wales, Queensland and Victoria, there is a statutory adoption of the liability for waste for a tenant for life or lives which does not apply to an estate or tenancy without impeachment of waste or affects a licence or other right to commit waste.12 A tenant who infringes this obligation is liable in damages to the tenants person in remainder or reversioner, but no criminal liability is imposed.13 An estate for life without impeachment of waste does not confer on the tenant for life any legal right to commit equitable waste, unless an intention to confer the right expressly appears in the instrument creating the estate.14 Notes 1 Initially life tenants were liable for waste only where they held life estates under a life estate created by operation of law, namely, dower and curtesy (see [355-115]). No action for waste lay against a life tenant holding under an express grant unless the instrument creating the life interest so provided as the grantor could have expressly prohibited waste: see Woodhouse v Walker (1880) 5 QBD 405 at 406. The common law rule was altered by the (IMP) Statute of Marlborough 1267 (52 Hen III c 23) which made life tenants liable for waste except where they had permission to commit it. This statute was received into Australia: see [355-50]. It has been adopted or modified in some jurisdictions: see note 12 below.2 Defries v Milne [1913] 1 Ch 98; (1912) 82 LJ Ch 1; 107 LT 593 , CA; Kinlyside v Thornton (1776) 2 Wm Bl 1111; 96 ER 657, KB; Marker v Kenrick (1853) 13 CB 188; 22 LJCP 129; 138 ER 1169, CA. See also R v Wright; Ex parte Klar (1971) 1 SASR 103 (merger of the common and statute law). As to the doctrine of waste generally see leases and tenancies [245-4435]-[245-4455].3 See leases and tenancies [2454440].4 See leases and tenancies [245-4445].5 Jones v Hill (1817) 7 Taunt 392; 129 ER 156 ; Manchester Bonded Warehouse Co Ltd v Carr (1880) 5 CPD 507; [1874-80] All ER Rep 563 ; Saner v Bilton (1878) 7 Ch D 815; 38 LT 281 .6 Hockley v Rendell (1909) 11 WALR 170 ; Brian Stevens Pty Ltd v Clarke (1965) 83 WN (Pt 1) (NSW) 32 , DC(NSW).7 Kinlyside v Thornton (1776) 2 Wm Bl 1111; 96 ER 657; Marker v Kenrick (1853) 13 CB 188; 22 LJCP 129; 138 ER 1169. As to covenants generally and the exclusion of implied covenants by express covenants dealing with the same subject matter see leases and tenancies [245-3000], [2453005]. See also tort.8 Brian Stevens Pty Ltd v Clarke (1965) 83 WN (Pt 1) (NSW) 32 .9 Meux v Cobley [1892] 2 Ch 253; (1891) 61 LJ Ch 449; 66 LT 86 . This is so even where the lessee has failed to comply with a condition of the consent: Doe d Wood v Morris (1809) 2 Taunt 52; 127 ER 995.10 Doe d Earl of Darlington v Bond (1826) 5 B & C 855; 108 ER 318, KB; Doe d Grubb v Earl of Burlington (1833) 5 B & Ad 507 at 517; 3 LJKB 26; 110 ER 878 at 881 ; Jones v Chappell (1875) LR 20 Eq 539; 44 LJ Ch 658; Doherty v Allman (1878) LR 3 App Cas 709; 39 LT 129; Meux v Cobley [1892] 2 Ch 253; (1891) 61 LJ Ch 449; 66 LT 86 . However, in certain circumstances, a substantial alteration to the demised premises may be characterised as waste despite the fact that the alteration may improve the premises in some way: Smyth v Carter (1853) 18 Beav 78; 52 ER 31 (demolition by tenant of landlords house to build another one which the landlord disliked); West Ham Central Charity Board v East London Waterworks Co [1900] 1 Ch 624; [1900-3] All ER Rep 1011; (1900) 82 LT 85 ; Marsden v Edward Heyes Ltd [1927] 2 KB 1; [1926] All ER Rep 329 (conversion of dwelling house into a shop so as to completely alter the character of the premises). 11 This is an expression of the equitable principle that equity will not permit a person to exercise a legal right unconscientiously: see, Turner v Wright (1860) 2 De GF & J 234 at 243-4; 45 ER 612

at 615, 616; Micklethwait v Micklethwait (1857) 1 De G & J 504 at 524; 44 ER 818 at 826; Baker v Sebright (1879) 13 Ch D 179 at 186 .12 (NT) Law of Property Act 2000 s 24(1) (NSW) Imperial Acts Application Act 1969 s 32 (QLD) Property Law Act 1974 s 24(1) (VIC) Property Law Act 1958 s 132A. There are no equivalent provisions in the other jurisdictions. 13 (NT) Law of Property Act 2000 s 24(2), 24(3) (QLD) Property Law Act 1974 s 24(2), 24(3). There are no equivalent provisions in the other jurisdictions. 14 (ACT) Civil Law (Property) Act 2006 s 207 (NT) Law of Property Act 2000 s 25 (NSW) Conveyancing Act 1919 s 9 (QLD) Property Law Act 1974 s 25 (SA) Law of Property Act 1936 s 12 (TAS) Settled Land Act 1884 ss 26(2), 27, 32 (VIC) Property Law Act 1958 s 133 (WA) Property Law Act 1969 s 17.

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(III) Future Interests (A) General The paragraph below is current to 25 September 2008 [355-130] Future interests An estate in land may be held in one of three ways: in possession, in reversion or in remainder.1 An estate in possession gives the owner an immediate or present right to possession or beneficial enjoyment of the land, although this right of ownership may be subject to a leasehold interest which grants a leaseholder immediate possession.2 Reversions and remainders are future interests inasmuch as the right to possession is postponed to a time in the future. A future interest is a property right that vests in the holder of the right upon its creation, but that does not allow the holder to have the possession and use of the property immediately. The interest confers on the holder the right to possession and use of the property in the future.3 For example, where X who is the holder of an estate in fee simple grants the land to Y for life, at the end of Ys life the land reverts to X.4 Thus, although X on granting the interest has no present right to possession X has, from the time of the grant, a present right to the reversion which can be alienated by gift, mortgage, will or transmitted on intestacy. Should X transfer the interest to W in fee simple at the same time5 as creating the life estate in Y , W would hold a present interest in the land although seisin can only be enjoyed on the death of Y . Ws interest is classified as a remainder (as W could not be said to revert to seisin, not having enjoyed it originally) as the interest is said to remain away from Y .6 A future interest is vested if it meets two requirements:7 (1) the person or persons entitled to it must be ascertained; and (2) it must be ready to take effect in possession immediately, subject only to the existence of a prior interest or interests. If these conditions are not met, the future interest is classified as a contingent interest.8 In the examples above, Ys life interest is vested in possession and vested in interest. Xs reversionary interest is described as vested in interest or a vested remainder but it is not as yet vested in possession.9 The significance of when the interests vests in possession is important for both the determination of the rule against perpetuities10 and for determining the commencement of the running of time in order to determine the statutory limitation period.11 There is no limit on the number of remainders which may be created. Thus, for example, X could grant to Y for life, then to Z for life, then to A for life, then to B for life.12 Consequently, Z, A and B are referred to as remaindermen. In addition to reversions and remainders, a third form of future interest was developed by equity and is an executory interest which may be classified as a shifting, springing or executory use or

devise.13 Notes 1 Blackstone, Sir W, Commentaries on the Laws of England, Vol 2 Clarendon Press, Oxford, 1765-69, p 163; Fearne C, An Essay in the Learning of Contingent Remainders and Executory Devises, 10th ed, Saunders and Benning, London, 1844. See also MacDonald C, McCrimmon L and Wallace A, Real Property Law in Queensland, LBC Information Services, Sydney, 1998, p 161; Bradbrook A J, MacCallum S V and Moore A P, Australian Real Property Law, 2nd ed, Sydney, LBC Information Services, 1997, [8.01].2 See, for example, Glenn v Federal Cmr of Land Tax (1915) 20 CLR 490 at 498; 21 ALR 465; [1915] HCA 57; BC1500010 per Griffiths CJ. See also Megarry R and Wade H W R, The Law of Real Property, 5th ed, Stevens, London, 1984, p 231.3 See Dwight v FCT (1992) 37 FCR 178 at 192; 107 ALR 407 per Hill J; Walsh Bay Developments Pty Ltd v FCT (1995) 130 ALR 415 at 427-8; 31 ATR 15; 95 ATC 4378 per Beaumont and Sackville JJ.4 Another example may be the grant of an estate for years. The remainderman holds the fee simple remainder subject to the term: see, for example, De Grey v Richardson (1747) 3 Atk 469; 2 ER 1069 .5 According to Coke, the remainder must be created in the same instrument as the lesser estate: Co Litt 49a. See also Bradbrook A J, MacCallum S V and Moore A P, Australian Real Property Law, 2nd ed, Sydney, LBC Information Services, 1997, [8.04].6 See Butt P, Land Law, 4th ed, Lawbook Co, Sydney, 2001, [608] who explains that where (adapting the example above) X transfers the interest in fee simple to W in a separate instrument, X is in effect conveying his or her reversionary interest to W who will enjoy seisin on the death of Y .7 See Megarry R and Wade H W R, The Law of Real Property, 5th ed, Stevens, London, 1984, pp 231-2. As to the legal remainder rules see [355-140].8 As to contingent interests see [355-135].9 See, for example, Dwight v FCT (1992) 37 FCR 178; 107 ALR 407 at 422 per Hill J.10 As to the rule against perpetuities see perpetuities and accumulations.11 As to limitation of actions in relation to future interests in land see limitation of actions [255-250].12 See, for example, Borastons Case (1587) 3 Co Rep 16a at 20a; 76 ER 664 (A for life, remainder to B for life, and, if B dies before A, remainder to C for life).13 See [355-155], [355160]. The paragraph below is current to 25 September 2008 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [355-135] Contingent interests If an interest is bound to take effect in possession at a future date it is a vested interest;1 if however, the interest may never fall into possession, then it is classified as a contingent interest.2 Conditions are divided into those which are precedent or subsequent to the vesting of the interests of the beneficiary.3 If no interest vests until the condition is fulfilled, then it is a condition precedent, but if the gift is already vested and the effect of the condition is to divest the beneficiary of the property if it is not fulfilled, then it is a condition subsequent.4 For example, where X grants Blackacre to W in fee simple if W remains married to Z. If the marriage between W and Z is dissolved, W would be divested of the estate. As at the date of the grant W and Z were married, W gains a vested estate in fee simple subject to the possibility of subsequent divestment.5 Where there is doubt in the interpretation of an instrument, courts favour interpreting a grant as vested (condition subsequent) rather than as a condition precedent.6 Where a condition is unclear as to whether it has or has not taken effect, it is void.7 In the case of a condition subsequent, the condition must be such that the persons effected can see from the

beginning, precisely and distinctly upon the happening of what event the preceding vested interest is to determine. In the case of a condition precedent, this is not necessary and all the beneficiary has to establish is that he or she satisfies the conditional qualification.8 A gift subject to a condition subsequent which is void takes effect free from that condition.9 If a gift is subject to a condition precedent which is void, the gift fails, never having vested.10 Types of examples of contingent remainders include: (1) Conditions precedent attaching to the vesting in possession. For example, X grants Blackacre to Y for life, then to W in fee simple if W marries. If W marries during the life of Y , then W will take the estate in fee simple.11 If W does not marry in the life of Y , the estate 12 reverts to X or Xs legal representative. (2) Conditions where the person or people who are to take the estate in remainder are not known at the time of the grant. For example, X grants Blackacre to Y for life then to my eldest child in fee. If at the time of grant X had no offspring the grant would only vest if and when a child is born.13 Conditions must not be imposed which conflict with public policy14 or infringe the rule against perpetuities.15 Contingent remainders are assignable in the same manner as vested remainders.16 Notes 1 See [355-130].2 See Blackstone, Sir W, Commentaries on the Laws of England, Vol 2, Clarendon Press, Oxford, 1765-69, p 164. Contingent remainders were not initially recognised by the common law and only vested remainders and reversions were recognised: see Littletons, Tenures. See also MacDonald C, McCrimmon L and Wallace A, Real Property Law in Queensland, LBC Information Services, Sydney, 1998, p 166. See, for example, Whitby v Von Luedecke [1906] 1 Ch 783; (1906) 94 LT 432 (gift of rents of estate to two sisters which was then to pass in fee simple on the death of one to the survivor. Held to be a contingent gift as it was not ascertainable at the time of the gift. As it was not a vested interest it was subject to and infringed the rule against perpetuities).3 Re Bradley [1994] 2 Qd R 233; BC9404388 .4 Reynish v Martin (1746) 3 Atk 330 at 332; 26 ER 991 at 992 ; Egerton v Earl Brownlow (1853) 4 HL Cas 1 at 74; [1843-60] All ER Rep 970; (1853) 10 ER 359 at 389 ; Ellis v Ellis (1802) 1 Sch and Lef 1; Re Gulbenkians Settlements; Hacobian v Maun [1968] Ch 126 at 133 ; Re Boulter; Capital and Counties Bank v Boulter [1922] 1 Ch 75; [1921] All ER Rep 167 ; Sifton v Sifton [1938] AC 656; [1938] 3 All ER 435 .5 As to conditions subsequent see, for example, Cunningham v Moody (1748) 1 Ves Sen 209; 27 ER 965 ; Doe d Willies v Martin (1790) 4 Term Rep 39; 100 ER 882 ; Re Masters Settlement; Master v Master [1910] 1 Ch 321.6 Egerton v Earl Brownlow (1853) 4 HL Cas 1; [1843-60] All ER Rep 970; (1853) 10 ER 359 ; Woodhouse v Herrick (1855) 1 K & J 352; 69 ER 494; Lady Langdale v Briggs (1856) 8 De GM & G 391; 44 ER 441 ; Re Greenwood; Goodhardt v Woodhead [1903] 1 Ch 749 at 755; (1903) 88 LT 212; 51 WR 358 ; Re Blackwell; Blackwell v Blackwell [1926] Ch 223 (affirmed Blackwell v Blackwell [1929] AC 318; [1929] All ER Rep 71 ); Bickersteth v Shanu [1936] AC 290; [1936] 1 All ER 227 ; Sifton v Sifton [1938] AC 656; [1938] 3 All ER 435 ; Permanent Trustee Co of New South Wales Ltd v DApice (1968) 118 CLR 105; [1969] ALR 437; (1968) 42 ALJR 22 (will devising estate of land as a life estate followed by a remainder after the decease of the said life tenant to the remainderman in fee simple. The remainderman predeceased the life tenant. The majority held that the phrase stated the obvious proposition that the remainder would not fall into the hands of the remainderman until the death of the life tenant, thus no contingency was created and the

remaindermans interested was vested from the outset).7 Re Viscount Exmouth (1883) 23 Ch D 158 at 164 per Fry J; Re Bradley [1994] 2 Qd R 233; BC9404388 . As to conditional gifts by will see succession [395-1130]-[395-1145]. As to conditional clauses in contracts see contract [110-2415].8 Re Lowrys Will Trusts [1967] Ch 638; [1966] 3 All ER 955 ; Re Gulbenkians Settlements; Hacobian v Maun [1968] Ch 126 at 132-3 ; Hyde v Holland [2003] NSWSC 733; BC200304479 .9 Re Gassiot; Fladgate v Vinters Co (1901) 70 LJ Ch 242 ; Re Greenwood; Goodhardt v Woodhead [1903] 1 Ch 749; (1903) 88 LT 212; 51 WR 358 , CA; Cram Foundation v Corbett-Jones [2006] NSWSC 495; BC200603747 .10 Re Turton; Whittington v Turton [1926] Ch 96; [1925] All ER Rep 340 (gift fails even if the condition is void for impossibility).11 See, for example, Borastons Case (1587) 3 Co Rep 16a at 20a; 76 ER 664 .12 In the above example, the estate of W must wait until the determination of Ys interest: see [355-140] (legal remainder rules). However, executory limitations may be framed to avoid the legal remainder rules and can interrupt or destroy an estate in substitution of another upon the occurrence of the contingency: see Egerton v Earl Brownlow (1853) 4 HL Cas 1 at 186; [184360] All ER Rep 970; (1853) 10 ER 359 . As to executory estates see [355-150].13 See, for example, Challoner v Bowyer (1587) 2 Leon 70; 74 ER 366; Borastons Case (1587) 3 Co Rep 16a at 20a; 76 ER 664 ; Archers Case (1597) 1 Co Rep 66b; 76 ER 146; Quarm v Quarm [1892] 1 QB 184; (1891) 66 LT 418; 40 WR 302 , DC. As to where contingent gifts were void for infringement of the rule against perpetuities see, for example, Re Ashforth; Sibley v Ashforth [1905] 1 Ch 535 . Compare Re Leghs Settlement Trusts; Public Trustee v Legh [1938] Ch 39; [1937] 3 All ER 823 , CA.14 See [355-2025].15 See perpetuities and accumulations.16 Despite earlier common law limitations: see Lampets Case (1612) 10 Co Rep 46b; 77 ER 994 ; Caraher v Lloyd (Official Assignee) (1905) 2 CLR 480; 11 ALR 400; [1905] HCA 18; BC0500038 . Statutory reform permits alienation by will and by deed. (1) By will: (ACT) Wills Act 1968 s 7(2)(a) (NT) Wills Act 2000 ss 3 (definition of property), 6 (NSW) Succession Act 2006 s 4 (QLD) Succession Act 1981 s 8(1) (SA) Wills Act 1936 s 4(2) (TAS) Wills Act 1992 s 5(1), 5(2)(b) (VIC) Wills Act 1997 s 4 (WA) Wills Act 1970 s 6. (1) By deed: (ACT) Civil Law (Property) Act 2006 s 225 (NT) Law of Property Act 2000 s 31 (NSW) Conveyancing Act 1919 s 50(1) (QLD) Property Law Act 1974 s 31 (SA) Law of Property Act 1936 s 10(a)

(TAS) Conveyancing and Law of Property Act 1884 s 80(1) (VIC) Property Law Act 1958 s 19(1). There is no equivalent provision in Western Australia. The paragraph below is current to 25 September 2008 To update legislation see ACL Legislation [355-140] Legal remainder rules The common law developed rigid rules in relation to the enforceability of remainders.1 These rules only applied to legal interests.2 The legal remainder rules were as follows: (1) A remainder or reversion after a grant in fee simple was void. For example, to X and her heirs with remainder to Y and his heirs.3 Here the gift in fee simple to X leaves the gift to Y as void. (2) A legal contingent remainder was void if it did not vest before or at the moment of the determination of the prior particular estate.4 For example: (a) to X for life, remainder in fee simple to any of her children living at her death who attain the age of 21 after her death. (b) to X for life, remainders in fee simple to those of her children living at her death who either before or after her death attain the age of 21.5 (c) to X for life, remainder to her first son to attain the age of 21.6 In the above cases the contingent remainders to the children of X were void as there would have been an abeyance of seisin between her death and the vesting of the estate. The common law courts would adopt a wait and see approach if the contingency had come to place by the time of the termination of the first estate. For example, to X for life, remainder in fee simple to her daughters who had reached the age of 21 by the time of Xs death. Here, if any daughters had reached the age of 21 by the time of Xs death the fee simple would vest in them at that time. If there were no daughters aged over 21 the contingent gift would be void and the estate reverted to the grantor.7 (3) If a particular prior estate was cut short by a legal contingent remainder, it was void. For example, to X for life, but if Y marries, to Y immediately in fee simple.8 The remainder to Y would be void. (4)

A remainder was void unless it was supported by an estate of freehold created by the same instrument. For example, to X for 50 years, remainder to the heir of Y in fee.9 As Y was still alive at the time of the grant the gift fails as the heir cannot be determined until Ys death. Similarly, if B holds an estate in fee simple to 80 acres and grants 20 acres to X that X could select at a later date, the grant to X would fail.10 The above rules only applied to legal estates but in the Court of Chancery all the limitations above that fail at common law were valid if the grantor employed the machinery of the use.11 Notes 1 See Colthurst v Bejushin (1550) 1 Plow 23; 75 ER 36, KB. See generally Bradbrook A J, MacCallum S V and Moore A P, Australian Real Property Law, 2nd ed, Sydney, LBC Information Services, 1997, [8.08]; Butt P, Land Law, 4th ed, Lawbook Co, Sydney, 2001, [1102]-[1107]. As to remainders see [355-130].2 As to equitable interests and devises of estates which were valid despite the legal remainder rules see [355-150]-[355-160]. As to statutory reform in relation to future interests see [355-170]-[355-190].3 Two fee simples absolute cannot be of one and the selfsame land: Co Litt 18a; Willion v Berkley (1561) 1 Plowd 223 at 248; 75 ER 339 ; Duke of Norfolks Case (1682) 3 Ch Cas 1; 22 ER 931 at 949-90 ; Earl of Stafford v Buckley (1750) 2 Ves Sen 170; 28 ER 111 (this is so whether the fee simple is absolute or determinable); Musgrave v Brooke (1884) 26 Ch D 792 .4 Cunliffe v Brancker (1876) 3 Ch D 393 , CA. The rule applied to all forms of conveyance of corporeal hereditaments operating at common law: see Roe d Wilkinson v Tranmarr (1757) Willes 682; [1558-1774] All ER Rep 461; (1757) 125 ER 1383. The reason for the rule was that the tenant of the freehold estate had to be available to perform the incidents of tenure and answer writs in relation to the freehold, so that there could not be an abeyance of seisin: Miles v Jarvis (1883) 24 Ch D 633 ; Freeman d Vernon v West (1763) 2 Wils 165; 95 ER 745; Re Beavis; Beavis v Beavis (1906) 7 SR (NSW) 66 at 68-9; 23 WN (NSW) 245 per Street J; Ho Young v Bess [1995] 1 WLR 350 at 355 , PC.5 See Brackenbury v Gibbons (1876) 2 Ch D 417 ; White v Summers [1908] 2 Ch 256 . Compare cases where executory devises were found which were are not bound by the legal contingent remainder rules: Re Lechmere and Lloyd (1881) 18 Ch D 524 ; Miles v Jarvis (1883) 24 Ch D 633 ; Dean v Dean [1891] 3 Ch 150 .6 See White v Summers [1908] 2 Ch 256 . Compare Festing v Allen (1843) 12 M & W 279; 152 ER 1204 ; Re Lechmere and Lloyd (1881) 18 Ch D 524 at 528 ; Finucane v Registrar of Titles [1902] St R Qd 75 .7 Festing v Allen (1843) 12 M & W 279; 152 ER 1204 ; Rhodes v Whitehead (1865) 2 Drew & Sm 532; 62 ER 722; Brackenbury v Gibbons (1876) 2 Ch D 417 ; Holmes v Prescott (1864) 10 Jur NS 507; (1864) 33 LJ Ch 264; 11 LT 38; 12 WR 636 . See also Bradbrook A J, MacCallum S V and Moore A P, Australian Real Property Law, 2nd ed, Sydney, LBC Information Services, 1997, [8.08].8 The common law was determined to allow the grant of a life estate to last its natural duration: see Cogan v Cogan (1594) Cro Eliz 360; 78 ER 608. Compare Blackman v Fysh [1892] 3 Ch 209 (executory devise, not a contingent remainder, therefore not void for breach of contingent remainder rules).9 Goodright v Cornish (1694) 1 Salk 226; 91 ER 200; Key v Gamble (1678) T Jo 123; Moore v Parker (1694) 1 Ld Raym 37; 91 ER 921; White v Summers [1908] 2 Ch 256 . Compare to X for 50 years, remainder to Y. Here the gift to Y vests immediately in Y with X having a right to possession: see Borastons Case (1587) 3 Co Rep 16a; 76 ER 664 .10 Bullock v Burdett (1567) 3 Dyer 281a; 73 ER 630; Savill Bros Ltd v Bethell [1902] 2 Ch 523 at 538, 540 .11 For examples, see Butt P, Land Law, 4th ed, Lawbook Co, Sydney, 2001, [1117]. Note however the effect of the (IMP) Statute of Uses 1535: see [355-150]. The paragraph below is current to 25 September 2008 To update legislation see ACL Legislation [355-145] Destructibility of legal contingent remainders Legal contingent remainders1 would fail to vest in two types of circumstances: through natural destruction or artificial destruction. Natural destruction of a contingent remainder would occur if the prior estate determined before

the contingent remainder vested. For example, to X for life and then to Y if she marries. If X dies before Y marries then the remainder to Y is destroyed.2 The courts permitted four methods of artificially and prematurely destroying the prior estate which would have the effect of destroying the contingent remainder.3 (1) Forfeiture. If the prior estate were forfeited, any contingent remainder supported by that estate failed. Forfeiture was achieved by the holder of the life estate purporting to convey an estate in fee simple to a third party. An attempt to convey an estate larger than that which the person held, was regarded as a tortious conveyance and a repudiation of the life estate, and where this occurred the contingent interest would then be destroyed.4 (2) Merger. Where a person acquires an estate immediately expectant on the termination of the persons interest, the particular estate is said to be annihilated by merger. For example, if G grants a life estate to X, remainder to Xs first son for life then if the holder of the fee simple reversion (G or his or her successor in title) conveyed the reversionary interest to X before the birth of Xs son, the contingent remainder was destroyed.5 (3) Surrender. If a particular estate were surrendered to the reversioner or to a vested remainderman in fee simple, or fee tail, the particular estate determined and any contingent remainder supported by that estate failed. For example, to X for life, then to Y for life if she should marry, then to Z. Here if X conveys her life estate to Z this would destroy Ys interest. (4) Disclaimer. Where a person disclaims his or her prior estate the subsequent contingent interest would be destroyed.6 Disclaimer is a solemn and irrevocable refusal to accept a benefit under a deed or other document or an act by which the person entitled to an estate immediately, and before dealing with it, renounces it.7 Property transferred by deed vests in the grantee at once. However, if a grantee is unaware of a grant, then when informed of the transfer, the grantee may disclaim it by record or deed, orally or by conduct.8 A disclaimer can only be made with knowledge of the interest alleged to be disclaimed and with an intention to disclaim it.9 Upon disclaimer, the grant is avoided and the property sought to be transferred is divested from the donee and revests in the donor.10 Where contingent remainders were limited in favour of a class (for example in a gift, to X for life and then to such of the children of Y who attain the age of 21) the members of which became capable of taking at different times, the entirety of the estate vested in those who first fulfilled the condition, and as others met the condition during the existence of the particular estate, the remainder was divested to the extent necessary to let in the later members.11 However, apart from statute, the interest of those who did not meet the condition during the relevant period was destroyed (that is, in the example above, who did not reach 21 by the time of Xs death).12 The destructibility of contingent remainders has now been largely modified by statute.13 Notes 1 As to legal contingent remainders see [355-130].2 See, for example, Doe d Mussell v Morgan (1790) 3 Term Rep 763; 100 ER 846; White v Summers [1908] 2 Ch 256 (to A for life,

remainder to the first son of B who attained 21 in fee, and A died before a son of B had attained 21). The only exception to this rule was if a child was en ventre sa mere (in its mothers womb) at the time of the destruction of the prior estate, the gift was saved: see (IMP) An Act to Enable Posthumous Children to Take Estates as if Born in their Fathers Lifetime 1698 (10 Wil III c 16) (deeds); Reeve v Long (1695) 1 Salk 227; 91 ER 202 (wills).3 As to destructibility of legal contingent remainders see Neave M A, Rossiter C J, Stone M A, Sackville and Neaves Property Law: Cases and Materials, 6th ed, Butterworths, Sydney, 1999, [3.3.63]-[3.3.68]; Bradbrook A J, MacCallum S V and Moore A P, Australian Real Property Law, 2nd ed, Sydney, LBC Information Services, 1997, [8.10].4 See Archers Case (1597) 1 Co Rep 66b; 76 ER 146; Chudleighs Case (1595) 1 Co Rep 113b; 76 ER 261.5 See, for example, Purefoy v Rogers (1671) 2 Saund 380; 85 ER 1181; Archers Case (1597) 1 Co Rep 66b; 76 ER 146.6 See, for example, Re Scott; Scott v Scott [1911] 2 Ch 374 .7 Thompson v Leach (1690) 2 Vent 198; 86 ER 391 ; Bence v Gilpin (1868) LR 3 Ex 76; Lady Naas v Westminster Bank Ltd [1940] AC 366; [1940] 1 All ER 485 .8 Standing v Bowring (1885) 31 Ch D 282; [1881-85] All ER Rep 702 .9 Lady Naas v Westminster Bank Ltd [1940] AC 366; [1940] 1 All ER 485 .10 Standing v Bowring (1885) 31 Ch D 282 at 286; [1881-85] All ER Rep 702 at 704 per Lord Halsbury LC. As to disclaiming a deed see deeds and other instruments [140-195].11 Matthews v Temple (1699) Comb 467; 9 ER 595; Oates d Hatterley v Jackson (1742) 2 Stra 1172; 93 ER 1107 ; Doe d Comberbach v Perryn (1789) 3 Term Rep 484; 100 ER 690.12 Festing v Allen (1843) 12 M & W 279; 152 ER 1204 ; Rhodes v Whitehead (1865) 2 Drew & Sm 532; 62 ER 722; Brackenbury v Gibbons (1876) 2 Ch D 417 ; Holmes v Prescott (1864) 10 Jur NS 507; (1864) 33 LJ Ch 264; 11 LT 38; 12 WR 636 .13 See [355-170]. The paragraph below is current to 25 September 2008 To update legislation see ACL Legislation [355-150] Executory limitations At common law, future interests could only be created inter vivos as remainders or reversions, and they had to comply with the rules applicable to remainders.1 Future interests, known as executory interests, which did not comply with the common law rules, could be created by limitations operating under the (IMP) Statute of Uses 1535 (the Statute),2 and by devise.3 When created under the Statute they were either springing or shifting uses, and they could only be created in estates of freehold.4 Executory interests under wills could exist either in freeholds or in chattels real, and are classified as springing or shifting devises.5 Future interests created in this manner were subject to a fundamental rule that a limitation which in its inception could operate as a remainder was not allowed to operate as an executory limitation.6 Executory limitations were so named as under the Statute, uses were executed, from the holder of the legal estate and vested in the cestui que use. For example, in a gift to L and his heirs to the use of X and his heirs, but if X marries P then to the use of Y and his heirs the legal estate of L was executed to X.7 In relation to the contingency, if X married P then the estate would shift from X to Y , destroying Xs estate through the operation of Statute and Y would gain a legal estate.8 Notes 1 As to the legal remainder rules see [355-140].2 As to the (IMP) Statute of Uses 1535 see [355205]. Prior to the enactment of the (IMP) Statute of Uses 1535, for example, a gift to X for life but if she marries A, then to Z would be invalid at law, however a gift to L to the use of X for life, but if she marries A, then to the use of Z would be valid in equity. As to the repeal of the (IMP) Statute of Uses 1535 in some Australian jurisdictions see [355-190].3 See [355-160].4 They could only be created in freeholds because the (IMP) Statute of Uses 1535 only applied to freeholds: see [355-205]. As to springing and shifting uses see [355-155].5 As to springing and shifting devises see [355-160].6 This was known as the rule in Purefoy v Rogers: see [355-165].7 See, for example, Re Lechmere and Lloyd (1881) 18 Ch D 524 ; Miles v Jarvis (1883) 24 Ch D 633 ;

Dean v Dean [1891] 3 Ch 150 .8 See Butt P, Land Law, 4th ed, Lawbook Co, Sydney, 2001, [1119]; Bradbrook A J, MacCallum S V and Moore A P, Australian Real Property Law, 2nd ed, Sydney, LBC Information Services, 1997, [8.12]. The paragraph below is current to 25 September 2008 To update legislation see ACL Legislation [355-155] Springing and shifting uses Uses created under the (IMP) Statute of Uses 1535 limited to take effect in the future were either by way of remainder1 and thus subject to the common law limitations2 or were classified as springing or shifting uses. Springing uses avoided the common law abhorrence of the abeyance of seisin. For example estates limited to arise at a future time or because the use was to arrive at an interval after the determination of the prior estate, are valid springing uses.3 For example, a grant to L and his heirs to the use of X and her heirs on the attainment of 21 years was enforceable as legal executory interest. Xs interest would spring up on her attaining the age of 21.4 Similarly a grant to the use of X for life and after a year from Xs death, to the use of Y in fee simple would be a valid grant to Y . A shifting use avoided the common law rules against remainders which were limited after a fee estate5 and the rule against remainders that vested in possession before the natural determination of the prior particular estate. Thus a grant to L and his heirs to the use of X for life, but if X marries A, to the use of Y and his heirs would be effectual in shifting the interest to Y in the event of Xs marriage to A.6 Notes 1 Under the rule in Purefoy v Rogers: see [355-165].2 See [355-140].3 See, for example, Cleres Case (1600) 6 Co Rep 17b; 77 ER 279; Davies v Speed (1692) 2 Salk 675; 91 ER 574 (affirmed Davis v Speed (1698) Show Parl Cas 104; 1 ER 72, HL); Lamb v Archer (1692) 1 Salk 225; 91 ER 200 (gift to X and the heirs of his body and if X dies without issue to Y. This was a good springing use to Y if he was alive at the time of the gift, but if the contingent part of the gift were to the heir of Y it would not be valid as the heir of Y is unascertinable until the death of Y). It was essential that the grantees to uses should take an immediate seisin. A grant by G to L to commence at a future date to the use of X and his heirs was the grant of a freehold to commence in the future, and was void: Roe d Wilkinson v Tranmarr (1757) Willes 682; [1558-1774] All ER Rep 461; (1757) 125 ER 1383; Goodtitle d Dodwell v Gibbs (1826) 5 B & C 709; 108 ER 264.4 In the period between the heir attaining 21 years and the date of the grant, the equitable estate was deemed to be held by the grantor.5 See [355-140].6 See, for example, Brents Case (1583) 2 Leon 14 at 16; 74 ER 319 at 320 (a grant to the use of A for life, and if B before a specified date should pay 100 to the grantor, then to the use of B for life, the second use would commence on the event of the contingency). The paragraph below is current to 25 September 2008 [355-160] Springing and shifting devises A future interest took effect as a springing devise when it was limited by the will so that it had no preceding estate of freehold to support it, or where there was a preceding estate limited, but there was necessarily a gap between the determination of the preceding estate and the vesting in possession of the future estate.1 For example, a future interest could be created in a will as a springing devise such as in the form of to X and her heirs when X reaches 21.2 The future interest might arise either at a time certain or on a contingency.3 The want of an immediately preceding freehold estate prevented the future interest from taking effect as a remainder,4 but was nevertheless valid as an executory devise,5 provided that it did not infringe the rule against perpetuities.6 Until the devise took effect in possession, the land devolved on the heir-at-law,7 or, on the personal representative.8 In this way the freehold was not

in abeyance.9 A future interest took effect as a shifting devise when it was so limited by the will that it did not wait for the natural determination of the preceding estate, but vested in possession upon an event which determined that estate otherwise than in accordance with its direct limitation. Thus, estates limited upon the natural determination of a life estate were remainders; but if there was a clause of forfeiture of the life estate, and the next interests were in that event accelerated, they took effect, on the event happening, as executory interests. For example, to X for life, but if X marries Y , to Z in fee, or to X and her heirs for life, but if X dies without children during Ys lifetime, to Y and his heirs.10 Notes 1 See, for example, Pays Case (1602) Cro Eliz 878; 78 ER 1103; Clarke v Smith (1700) 1 Lut 793 at 798; 78 ER 1103 (a devise to A in fee to take effect at the expiration of six months from the testators death); Gore v Gore (1722) 2 P Wms 28; 24 ER 629; Hopkins v Hopkins (1738) 1 Atk 581; 26 ER 365 ; Bullock v Stones (1754) 2 Ves Sen 521; 24 ER 629 (to the first son of A and A has no son at the testators death). See also White v Summers [1908] 2 Ch 256 (a devise to A for life, and after his death and one day, to the eldest son of B).2 Doe d Andrew v Hutton (1804) 3 Bos & P 643; 127 ER 347.3 See, for example, Gore v Gore (1722) 2 P Wms 28; 24 ER 629; Hopkins v Hopkins (1738) 1 Atk 581; 26 ER 365 ; Bullock v Stones (1754) 2 Ves Sen 521; 24 ER 629.4 Thus not meeting with the requirement of the rule in Purefoy v Rogers: see [355-165]. 5 As to the distinction between executory devises and remainders see [355-140], [355-165]. This might happen in the case of a springing devise to a class. For example in a devise, to X and their heirs for life, to the children of X who attain 21 either before or after the death X, the express inclusion of children attaining 21 after Xs death showed that a gap between the life estate and the future interests was contemplated. Thus, since the future interests could not, as to children attaining 21 after the death, take effect as remainders, they were all executory devises: see Re Lechmere and Lloyd (1881) 18 Ch D 524 ; Re Bourne; Rymer v Harpley (1887) 56 LJ Ch 566; 56 LT 388 ; Dean v Dean [1891] 3 Ch 150 ; Re Wrightson; Battie-Wrightson v Thomas [1904] 2 Ch 95 at 104 , CA. See also Miles v Jarvis (1883) 24 Ch D 633 (to X for life, then to the children of Y born before or after the death of X).6 As to the rule against perpetuities see perpetuities and accumulations.7 See Pays Case (1602) Cro Eliz 878; 78 ER 1103; Clarke v Smith (1700) 1 Lut 793 at 798; 78 ER 1103; Gore v Gore (1722) 2 P Wms 28 at 47; 24 ER 629.8 As to the vesting of a testators real property in their personal representative see succession [395-4050].9 As to the aversion of the common law to an abeyance of seisin see [355-140] note 4.10 Blackman v Fysh [1892] 3 Ch 209 , CA; Re Leach; Leach v Leach [1912] 2 Ch 422 . The paragraph below is current to 25 September 2008 To update legislation see ACL Legislation [355-165] The rule in Purefoy v Rogers The common law developed a limitation on the question of future interests which employed the operation of a use1 such that if the interest created could comply with the common law legal contingent remainder rules2 it was not to be construed as an executory interest,3 but was to be treated as a contingent remainder and be subject to the common law rules.4 For example, to L and his heirs to the use of X for life and then to the use of Y and her heirs, provided Y has attained the age of 21. Here the legal estate to L would be executed to X under the operation of the (IMP) Statute of Uses 1535, but as the contingency was capable of complying with the legal remainder rules, it was classified as a contingent remainder and not an executory interest.5 This common law rule was a rule of construction and so operated regardless of the intention of the donor or grantor.6 Methods of conveying an interest that avoided this rule included drafting the instrument so as to

breach the contingent remainder rules such as to L and her heirs for the use of X for life, then to the use of Y if she marries or does not marry before the death of X.7 This rule has been abolished in most Australian jurisdictions.8 Notes 1 See [355-195].2 See [355-140].3 As to executory interests see [355-150].4 Purefoy v Rogers (1671) 2 Saund 380 at 388; 85 ER 1181 at 1192 per Hale CJ. See also Chudleighs Case (1595) 1 Co Rep 113b; 76 ER 261; Doe d Mussell v Morgan (1790) 3 Term Rep 763; 100 ER 846; Festing v Allen (1843) 12 M & W 279; 152 ER 1204 ; White v Summers [1908] 2 Ch 256 .5 The advantage of classifying an interest as a contingent remainder was that they were susceptible to destruction (see [355-145]) which suited the common laws desire of preventing land owners from controlling the disposition of their lands for indefinite periods in the future: see Neave M A, Rossiter C J, Stone M A, Sackville and Neaves Property Law: Cases and Materials, 6th ed, Butterworths, Sydney, 1999, [4.101].6 White v Summers [1908] 2 Ch 256 at 267 .7 See White v Summers [1908] 2 Ch 256 at 267 per Parker J; Dean v Dean [1891] 3 Ch 150 at 1556 ; Re Lechmere and Lloyd (1881) 18 Ch D 524 ; Miles v Jarvis (1883) 24 Ch D 633 ; Re Caraher (1904) 21 WN (NSW) 213 at 215-16 .8 See [355-170].

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(G) History of Equity in Land Law The paragraph below is current to 25 September 2008 To update legislation see ACL Legislation

[355-195] Development of the use The common law restrictions on land holding, including the feudal incidents of tenure,1 especially duties owed on the death of the holder of the estate in fee simple, the restrictions on the methods of conveying land as well as the prohibition on the devising of land2 were factors in the development of the practice of transferring property to a trusted third party for the benefit or use of another.3 By the device of the use, the owner A of the estate of land, could convey the land to X to the use of Y. In such a case X became the holder of As legal interest and Y was entitled to the beneficial enjoyment of the land. X was known as the feoffee to uses and Y , the cestui que use. The advantages of the use were that the tenant in fee simple could grant the land to another prior to his death for the use of all his children or any others thus avoiding the common law rule of primogeniture which restricted the disposition of the land by will. The feudal burdens such as wardship and relief could be avoided in a similar manner as the legal estate could be conveyed to a number of feoffees which were never permitted to fall below two. Since the tenant in fee simple was not seised of the land at his death, duties were not payable and there would be no wards who would be subject to the overlords protection. The use was also used to create future interests in land which would have been defeated by the common law rules on contingent remainders.4 Notes 1 As to tenure see [355-70].2 Prior to the (IMP) Statute of Wills 1540 (repealed) (32 Hen VIII c1) and the (IMP) Tenures Abolition Act 1660 (12 Car II c 24), the common law did not permit the disposition of land by will. The oldest son inherited the entire property of the land holder to the exclusion of any other descendants: see [355-90] note 4. If there were no descendants the land would revert to the overlord through the right of escheat. As to escheat and its abolition see [35575] note 2.3 For a general introduction to the employment of uses see Butt P, Land Law, 4th ed, Lawbook Co, Sydney, 2001, Ch 7; Bradbrook A J, MacCallum S V and Moore A P, Australian Real Property Law, 2nd ed, Sydney, LBC Information Services, 1997, [2.51]-[2.71]; Neave M A, Rossiter C J, Stone M A, Sackville and Neaves Property Law: Cases and Materials, 6th ed, Butterworths, Sydney, 1999, [4.80]-[4.109]; MacDonald C, McCrimmon L and Wallace A Real Property Law in Queensland, LBC Information Services, Sydney, 1998, Ch 5; Megarry R and Wade H W R, The Law of Real Property, 5th ed, Stevens, London, 1984, pp 1164-75.4 See [355140], [355-150]. The paragraph below is current to 25 September 2008 [355-200] Enforcement of uses The common law did not recognise any rights of the cestui que use. However, the Court of Chancery, which had been developed from practices established by the Kings Chancellor, began to protect the rights of the cestui que use by the second half of the fifteenth century, on the basis of the conscience of the feoffee to uses who was bound to observe the use.1 The Chancellor gradually extended the protection of the use to the heirs of the original cestui que use and to devisees of any feoffee. The extent of the protection went also to a purchaser for value of the legal estate who knew or ought to have known at the time of purchase of the existence of the use or to a person taking the legal estate as a gift from the feoffee to uses.2 This recognition of the rights of the cestui que use against third parties was an indicia of a proprietary right of the beneficial ownership of the cestui que use, a practice which has led to the division of ownership of property which continues today, namely between the rights of the legal estate holder (the legal estate) which are enforceable at common law and the right of the beneficial owner in equity (the equitable estate).3 Successive Chancellors developed the concepts of equitable ownership, but these mostly

followed the common law types of estate. Equitable interests that were recognised included the equitable fee simple, the equitable fee tail, the equitable life interest and the equitable leasehold.4 Equity also has continued to develop other interests such as remainders and reversions of leaseholds,5 security interests such as the equity of redemption of a mortgagor, 6 future interests7 and restrictive covenants.8 Notes 1 See Butt P, Land Law, 4th ed, Lawbook Co, Sydney, 2001, [704]-[706]; Neave M A, Rossiter C J, Stone M A, Sackville and Neaves Property Law: Cases and Materials, 6th ed, Butterworths, Sydney, 1999, [4.88].2 This was the foundation of the modern doctrine of notice, as to which see [355-3625].3 As to the distinctions between the holders of legal and equitable property interests see [355-3600]-[355-3685].4 As to the creation of equitable interests see [355-2220]-[3552300].5 See leases and tenancies [245-20].6 The equity of redemption now applies only to mortgages of general law land: see mortgages and securities [295-2005].7 See [355-130].8 See [355-12524]-[355-12650]. The paragraph below is current to 25 September 2008 To update legislation see ACL Legislation [355-205] The Statute of Uses The increasing practice of holding land for use during the fourteenth and fifteenth centuries significantly reduced the benefits of tenurial incidents, primarily to the King, who sat at the top of the feudal pyramid. Henry VIII sought to solve this problem and after a series of attempts, forced the introduction of the (IMP) Statute of Uses 1535 (the Statute).1 The purpose of the Statute was not to abolish the practice of uses but to execute them so that the holder of the legal estate was divested of his or her title and the feoffee to uses interest was executed into a legal estate.2 On executing the estate to uses to a legal estate the cestui que use was compelled to perform the tenurial incidents of the estate.3 Qualifications to the statute included that the cestui que use be seised of the land, tenement or hereditament. If the feoffee to uses was seised of the land the use was not executed.4 Similarly, if the legal feoffee had active duties to perform, the use was not executed,5 nor was this the case where the feoffee was seised of the land to his or her own use.6 The Statute also led to the creation of new future legal interests in land.7 An important qualification to the Statute was that a use upon a use was not executed by the Statute.8 For example to X and his heirs to the use of Y to the use of Z. Prior to the enactment of the Statute, the common law had held that the second use (to Z) was void, so after the enactment of the Statute, as there was no valid use, it could not be executed.9 A politically contentious effect of the Statute was the re-establishment of the feudal dues on the death of the cestui que use whose interest had been executed by Statute. As the cestui que use became the holder of the legal estate, he or she was believed to be subject to the common law restraint on divestment of interests in land by will. In 1540, Henry VIII was forced to introduce the (IMP) Statute of Wills 1540 (repealed) which restored the capacity of tenants to devise land.10 The (IMP) Statute of Uses 1535 has been abolished in a number of Australian jurisdictions.11 Notes 1 As to the history of the passing of the (IMP) Statute of Uses 1535 see Holdsworth W A, A History of English Law, 2nd ed, Vol IV, Sweet & Maxwell, London, 1937, pp 450-61; Butt P, Land Law, 4th ed, Lawbook Co, Sydney, 2001, [707]-[715]. See also Brents Case (1583) 2 Leon 14; 74 ER 3192 (IMP) Statute of Uses 1535 s 1 (27 Hen VIII c 10) (this applied to feoffees of an

estate in fee simple, fee tail, for life or years or for any estate of remainder or reverter or other hereditaments).3 As to tenure see [355-70].4 See Reference to the Judges (1580) Dyer 369a; 73 ER 827. For example, to X for 50 years to the use of Y and her heirs. In a conveyance for years (a leasehold), the landlord X was said to be seised of the estate so, the cestui que use Y retained the equitable interest.5 For example, if the feoffee was seised of the land to collect rents and profits for the cestui que use.6 Compare the modern position where the holder of a legal estate cannot concurrently be the sole holder of the equitable estate. In such cases the estates merge and the person holds an absolute legal estate: see DKLR Holding Co (No 2) Pty Ltd v Cmr of Stamp Duties (NSW) [1980] 1 NSWLR 510 at 518-20; (1980) 10 ATR 942; 80 ATC 4279 per Hope and Glass JJA, CA(NSW) (affirmed DKLR Holding Co (No 2) Pty Ltd v Cmr of Stamp Duties (NSW) (1982) 149 CLR 431 at 442, at 463, at 474; 40 ALR 1 at 9, at 26, at 35; 56 ALJR 287; BC8200057 per Gibbs CJ, Aickin and Brennan JJ respectively. See further trusts [430320].7 See [355-150].8 See Tyrrels Case (1557) 2 Dyer 155a; 73 ER 336 (equitable conveyance of fee simple estate (thus an implied use) to the use of the vendor for life and then to the use of certain others after her death); Doe d Lloyd v Passingham (1827) 6 B & C 305; 108 ER 465 at 467 .9 Subsequently the Court of Chancery began to recognise uses upon a use: see [355-210].10 Under the (IMP) Statute of Wills 1540 (repealed) ss 1, 2 (32 Hen VIII c1) tenants in socage were able to devise the whole of their estate, tenants of land in knight service could devise two thirds of their land. Under (IMP) Tenures Abolition Act 1660 ss 1, 2 (12 Car II c 24) all freehold tenures were converted to socage tenure which then removed restraints on disposing of land by will. As to knight and socage tenure see [355-70].11 See [355-190]. The paragraph below is current to 25 September 2008 To update legislation see ACL Legislation [355-210] Development of the trust With the abolition of the feudal incidents of tenure 1 the Court of Chancery began to enforce the use upon a use during the seventeenth century,2 despite the earlier decision in Tyrrels Case which held to the contrary.3 Thus in a grant to X and his heirs to the use of Y and his heirs to the use of Z and his heirs, under the (IMP) Statute of Uses 1535, the legal estate in fee simple is executed to Y (and X would retain nothing) and an equitable estate in fee simple is granted to Z. New terminology also began to be used and the old terminology of use, feoffee to uses and cestui to use, was replaced by trust, trustee and beneficiary. In conveyances, the wording to X and his heirs to the use of Y and his heirs in trust for Z and his heirs was commonly adopted.4 Alternatively a grant to X and his heirs to the use of X and his heirs in trust for Y and his heirs which was often reduced to unto and to the use of X on trust for Y would convey a legal fee simple to X and the beneficial interest to Y.5 Notes 1 See [355-70].2 See, for example, Sambach v Dalston (or Darston) (1635) Toth 188; 21 ER 164 sub nom Morris, Lambeth and Margery Ux v Darston (1653) Nels 30; 21 ER 781; Symson v Turner (1700) 1 Eq Cas Abr 383; 21 ER 119. See further Butt P, Land Law, 4th ed, Lawbook Co, Sydney, 2001, [718].3 Tyrrels Case (1557) 2 Dyer 155a; 73 ER 336 . As to uses see [355195].4 As to the modern law of trusts see trusts.5 In the Northern Territory, New South Wales, Queensland and Victoria, where the (IMP) Statute of Uses 1535 has been abolished (see [355190]) a conveyance of a fee simple on trust can now simply be made to X in fee simple on trust for Y in fee simple. As to the creation of express trusts see trusts [430-240]-[430-255].

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(C) Other The paragraph below is current to 25 September 2008 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [355-2090] Estate pur autre vie Rather than use the life of the grantee as the measuring life a grantor may use that of an independent person, for example, to X for the life of Y. Here Y becomes the measuring life and is called the cestui que vie.1 The problem in this area in the past was what position resulted where X predeceased Y . At common law, the doctrine of occupancy was used to resolve the issue. According to this doctrine, in the event of the death of the life tenant, the person who first entered the estate was entitled as a general occupant for the remainder of the life of the cestui que vie (the person who is alive). However, such a person assumed no liability for the life tenants debts. Where the grantor indicated otherwise, for example, as in the following grant: to X and his heirs for the life of Y then the heir of the life tenant was entitled to hold the estate for the remainder of the life of the cestui que vie, as special occupant. This was not to make the special occupant a successor to the estate. The occupation arose simply from the use of the word heirs. The special occupant was similarly not obligated to pay the debts of the life tenant. A life estate is not an estate of inheritance. The doctrine of occupation has been abolished and statutory provisions now generally indicate the course of evolution of estates on intestacy,2 and, in the absence of a next of kin, the Crown takes the estate as bona vacantia.3 Notes 1 Not usually by direct grant but by the life tenant conveying the interest to another. This has been abolished in Australian Capital Territory: see (ACT) Law Reform (Abolitions and Repeals) Act 1996 (repealed) s 3.2 (ACT) Administration and Probate Act 1929 s 45

(NT) Administration and Probate Act 1969 s 62; (NT) Law of Property Act 2000 s 20 (NSW) Probate and Administration Act 1898 Pt 2 Div 2A (QLD) Succession Act 1981 Pt 3 (SA) Administration and Probate Act 1919 Pt 3A (VIC) Administration and Probate Act 1958 Pt I Div 6 (TAS) Administration and Probate Act 1935 Pt V (WA) Administration Act 1903 Pt II. See generally succession [395-840]-[395-2095]. 3 (ACT) Administration and Probate Act 1929 Sch 6 (NT) Administration and Probate Act 1969 Sch 6 (NSW) Probate and Administration Act 1898 s 61B(7) (QLD) Succession Act 1981 Sch 2 Pt 2 (SA) Administration and Probate Act 1919 s 72G(e) (TAS) Administration and Probate Act 1935 s 45 (VIC) Administration and Probate Act 1958 s 55. In Western Australia, the principle of escheat still applies: (WA) Administration Act 1903 s 14; (WA) Escheat (Procedure) Act 1940. As to bona vacantia and escheat see succession [3951970], [395-1975]. The paragraph below is current to 25 September 2008 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [355-2095] Dower and curtesy At common law a widow had the right (dower) to a life interest in one third of the lands held by her late husband in fee, either solely or as tenant in common during coverture (marriage) and to which her issue, if any, might have succeeded. Conversely, a widower had the right (curtesy) to a life estate in the entire property of his deceased wifes real property held in tenancy in common provided that an heir capable of inheriting the land had been born of the marriage. Both of these life estates have been statutorily abolished in the Australian Capital Territory, the Northern Territory, New South Wales, Queensland, South Australia, Tasmania and Western Australia.1 Notes 1 See, for example: (ACT) Administration and Probate Act 1929 s 48 (NT) Administration and Probate Act 1969 s 65

(NSW) Conveyancing Act 1919 s 21 (dower); (NSW) Probate and Administration Act 1898 s 52 (dower and curtesy) (QLD) Intestacy Act 1877 (repealed) s 28 (SA) Administration and Probate Act 1919 s 46 (TAS) Conveyancing and Law of Property Act 1884 s 89 (dower and curtesy) (WA) Administration Act 1903 s 16. For the definitions of dower and curtesy see Butterworths Australian Legal Dictionary. Both were gradually repealed through either the 19th or 20th centuries in every jurisdiction. The paragraph below is current to 25 September 2008 [355-2100] Emblements Emblements are crops and vegetables, produced through an individuals labour or industry which yield a present or current profit. To encourage good farming the common law allows a life tenant who has planted emblements to reap them even though the tenancy has expired before the crops matured.1 Though emblements include fructus industriales which consist of crops that do not mature within a year (for example, clover) the right to reap them does not cover these.2 In respect of the right to reap emblements, a life tenants right accrues to the personal representatives of a deceased life tenant.3 There is some controversy whether in Australia a life tenant has rights in respect of growing timber.4 In England, where the land is a timber estate, the life tenant is entitled to profits accruing from the management of such an estate.5 Notes 1 Graves v Weld (1833) 5 B & Ad 105; 110 ER 731 ; Tynte (1986) Ltd v Cmr of Stamps (SA) (1995) 65 SASR 188 at 192-3; 31 ATR 227; 95 ATC 4571 at 4574 ; Kirby v Caruso [1976] Qd R 164 , SC(QLD), Full Court.2 Official Trustee in Bankruptcy v Westpac Banking Corp Ltd (1987) 17 FCR 172; 77 ALR 677 ; Hohn v Mailler (2003) 11 BPR 29,891; [2003] NSWCA 122; BC200302532 .3 Grantham v Hawley (1603) Hob 132; 80 ER 281 .4 See Re Hart [1954] SASR 1 at 8 per Reed J.5 Honywood v Honywood (1874) LR 18 Eq 306; [1874-80] All ER Rep Ext 1946. The paragraph below is current to 25 September 2008 [355-2105] Fixtures A life tenant may remove fixtures which he or she has brought onto the land provided they are in the nature of domestic, ornamental or trade fixtures.1 Fixtures are things which were once chattels but which have become so affixed or integrated into the land that they are considered a part of the land, by application of the principle quicquid plantatur solo, solo cedit (whatever is annexed to the realty becomes part of it).2 Notes 1 See [355-2405].2 As to fixtures generally see [355-2365]-[355-2490]. See also leases and tenancies [245-1195]-[245-1275].

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(C) The Register The paragraph below is current to 16 June 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [355-8020] The obligation to maintain the Register The central and essential element of the Torrens system is the Register or record1 that is referred to as the Register in all jurisdictions except South Australia where it is referred to as the Register Book.2 The obligation to maintain the Register is imposed on an official variously known as the Registrar-General,3 the Registrar of Titles4 or the Recorder of Titles. 5 The descriptions Register and Registrar are used herein. Generally, the Register consists of the instruments or dealings that are registered under the provisions of the Torrens legislation and such other instruments as are required to be kept under the legislation.6 However, the Northern Territory and Victorian legislation specifically provides that the record of dealings are not part of the Register.7 The Register was initially kept in the form of a volume in which the individual pages or folios comprised the individual certificates of title but technological advances have prompted a move to computerisation of the Register and there is legislation in all jurisdictions to facilitate this process.8 This may take the form of merely providing that the Registrar may keep the Register in whatever form or medium the Registrar thinks is appropriate.9 Notes 1 (ACT) Land Titles Act 1925 s 43 (NT) Land Title Act 2000 ss 29-38

(NSW) Real Property Act 1900 ss 31B, 32 (QLD) Land Title Act 1994 ss 27-46 (SA) Real Property Act 1886 ss 47-49, 51B, 51C (TAS) Land Titles Act 1980 s 33 (VIC) Transfer of Land Act 1958 s 27 (WA) Transfer of Land Act 1893 s 48. 2 (ACT) Land Titles Act 1925 s 43 (NT) Land Title Act 2000 s 6(2) (NSW) Real Property Act 1900 s 31B(1) (QLD) Land Title Act 1994 s 8(1) (SA) Real Property Act 1886 s 47 (TAS) Land Titles Act 1980 s 33(1) (VIC) Transfer of Land Act 1958 s 27 (WA) Transfer of Land Act 1893 s 48. 3 (ACT) Land Titles Act 1925 s 43 (NT) Land Title Act 2000 s 6(1) (NSW) Real Property Act 1900 s 4 (SA) Real Property Act 1886 s 13. As to the powers and duties of the Registrar see [355-8040]-[355-8075]. 4 (QLD) Land Title Act 1994 s 6(1) (VIC) Transfer of Land Act 1958 s 5 (WA) Transfer of Land Act 1893 ss 5 (provides for the appointment of the Commissioner of Titles), 7 (provides for the appointment of the Registrar of Titles), 7A (provides that one person may be appointed as both Registrar of Titles and Commissioner of Titles). 5 (TAS) Land Titles Act 1980 s 4.6 (ACT) Land Titles Act 1925 s 43 (Register to be kept in such form as the Registrar-General thinks fit and consists of folios of the Register, instruments, plans and registered documents.) (NT) Land Title Act 2000 s 6(2) (Register comprised of particulars in accord with ibid ss 30, 31, registered instruments and documents lodged with Registrar but not registered) (NSW) Real Property Act 1900 s 31B(2) (Register comprises of folios, registered dealings and other records and prescribed instruments as provided) (QLD) Land Title Act 1994 s 31 (upon registration an instrument forms part of the Register) (SA) Real Property Act 1886 s 57 (instruments when registered are deemed to be part of the

Register Book) (TAS) Land Titles Act 1980 s 33(4) (Register comprises folios, registered dealings and stratum plans) (VIC) Transfer of Land Act 1958 s 27(4) (Register consists of folios) (WA) Transfer of Land Act 1893 s 53 (registered instruments are to be included in the Register). 7 (NT) Land Title Act 2000 s 29(2) (VIC) Transfer of Land Act 1958 s 27C. 8 (ACT) Land Titles Act 1925 s 43(2), 43(3) (NT) Land Title Act 2000 s 6(3) (NSW) Real Property Act 1900 s 31B(3) (QLD) Land Title Act 1994 s 8 (SA) Real Property Act 1886 s 51B (TAS) Land Titles Act 1980 s 33(3) (VIC) Transfer of Land Act 1958 s 27(2), 27(3) (WA) Transfer of Land Act 1893 s 48(2) (Register to be maintained in any medium). 9 (ACT) Land Titles Act 1925 s 43 (NT) Land Title Act 2000 s 6(3) (NSW) Real Property Act 1900 s 31B(3), 31B(4) (QLD) Land Title Act 1994 s 8 (SA) Real Property Act 1886 s 51B (VIC) Transfer of Land Act 1958 s 27(2) (TAS) Land Titles Act 1980 s 33(2), 33(3) (WA) Transfer of Land Act 1893 s 48(2). The paragraph below is current to 16 June 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [355-8025] Certificates of title and folios of the Register The title details for land under the Torrens system are kept on the Register1 and, depending on the form in which the Register is kept, this central repository is referred to as the certificate of title or the folio of the Register.2 The importance of the Register as the central feature of the Torrens system has been judicially recognised.3 However, the importance of the Register is not inconsistent with the proposition that although the act of registration may create the title,4 the title is conceptually distinct from the

Register.5 It is generally permissible to create separate certificates of title or folios for different interests in the same land such as a fee simple, lease, estate in remainder or an undivided share.6 However, the provisions for the creation of separate indefeasible titles and for the issue of separate certificates of title are more limited in Queensland and Victoria than in other jurisdictions.7 In some jurisdictions, one certificate may cover several parcels of land even if the parcels are not contiguous, provided that this can be done conveniently.8 In most jurisdictions, a certificate of title (that may be referred to as a duplicate certificate of title) reflecting the information recorded on the Register is issued to the owner of the land.9 In New South Wales, the Registrar-General is required to issue a certificate of title at the request of the registered proprietor of the land or any registered mortgagee provided that any previously issued certificate of title has been lodged.10 In the Northern Territory and Queensland, the Registrar may not issue a certificate of title if the land is subject to a registered mortgage.11 Where there is no registered mortgage the Registrar must issue a certificate of title at the written request of the registered owner but is entitled to delay issue until after any instrument that has been lodged at the time of the request is registered.12 Notes 1 (ACT) Land Titles Act 1925 ss 44-47 (NT) Land Title Act 2000 s 30 (NSW) Real Property Act 1900 s 33 (QLD) Land Title Act 1994 s 27 (SA) Real Property Act 1886 ss 48, 51C (TAS) Land Titles Act 1980 s 33 (VIC) Transfer of Land Act 1958 s 27(1) (WA) Transfer of Land Act 1893 ss 48-50. As to the Register generally see [355-8020]. 2 (ACT) Land Titles Act 1925 s 43 (folio) (NT) Land Title Act 2000 s 39 (indefeasible title) (NSW) Real Property Act 1900 s 32 (folio) (QLD) Land Title Act 1994 s 37 (indefeasible title) (SA) Real Property Act 1886 ss 49, 51B (certificate of title) (TAS) Land Titles Act 1980 s 33(4) (folios, registered dealings and schemes) (VIC) Transfer of Land Act 1958 s 27(4) (folio of the Register) (WA) Transfer of Land Act 1893 s 48A (certificate of title). 3 Fels v Knowles (1906) 26 NZLR 604 ; Waimiha Sawmilling Co Ltd (in liq) v Waione Timber Co Ltd [1926] AC 101 at 106 per Lord Buckmaster, PC.4 Breskvar v Wall (1971) 126 CLR 376; [1972] ALR 205; (1971) 46 ALJR 68; BC7100630 (applied Hillpalm Pty Ltd v Heavens Door Pty Ltd (2004) 220 CLR 472; 137 LGERA 57; [2004] HCA 59; BC200408154 ).5 Custodian of Expropriated Property v Tedep (1964) 113 CLR 318; [1965] ALR 941; (1964) 38

ALJR 344 .6 (ACT) Land Titles Act 1925 ss 44, 54-56 (these provisions specifically refer to the issue of separate certificates in respect of freehold and leasehold interests and also to joint tenants and tenants in common in respect of their undivided interests) (NT) Land Title Act 2000 ss 4 (definition of registered owner includes fee simple interest and Crown lease), 56 (life estate), 58 (separate indefeasible titles for tenants in common), 65 (lease) (NSW) Real Property Act 1900 s 100(2) (Registrar-General entitled to create a separate folio or folios of the Register in respect of the interests of persons who are entitled to be registered as proprietors of a life estate, an estate in remainder or as tenants in common of shares in land under the provisions of the Act and may issue separate certificates of title in respect of those interests). See also ibid s 32(3) (Registrar-General may create a folio or folios for the estate or interest of a person who is the registered proprietor of a lease; however, the authorisation in respect of the leasehold interest does not extend to the right to issue a separate certificate of title and as ibid s 100(2) specifically excludes land comprised in a folio issued under ibid s 32(3) from its ambit, it would seem that no certificate may be issued in respect of leasehold interests). (QLD) Land Title Act 1994 s 44 (Registrar cannot issue a certificate of title for a lot unless any prior certificate is cancelled). See, however, ibid ss 55 (Registrar may record a life interest or interest in remainder in a lot in any manner considered appropriate), 57(2) (specifically contemplates the issue of a separate indefeasible title for the interest of each tenant in common and it would appear from ibid ss 42(1), 57(2) that this means the Registrar may issue separate certificates at the request of the registered proprietor). (SA) Real Property Act 1886 ss 73, 74, 75 (TAS) Land Titles Act 1980 s 33(6) (VIC) Transfer of Land Act 1958 ss 30(2) (tenants in common), 98D (share interests) (WA) Transfer of Land Act 1893 ss 39 (leasehold), 60 (undivided shares), 221 (remainder). 7 (QLD) Land Title Act 1994 contains no specific reference to leases in this context. A lease can be registered under ibid s 64 but as the Register required to be kept under ibid s 27 is a Register of freehold land, it would appear that no separate certificate of title could be created for a leasehold interest. (VIC) Transfer of Land Act 1958 does not provide for the issue of certificates of title in respect of leasehold land. 8 (ACT) Land Titles Act 1925 s 45 (NT) Land Title Act 2000 s 41(1) (NSW) Real Property Act 1900 ss 32(4) (Registrar may create new folios for the whole or part of land comprised in one or more folios of the Register), 33(1) (Registrar may issue a certificate of title for the land comprised in any folio) (QLD) Land Title Act 1994 s 39(1) (TAS) Land Titles Act 1980 s 33(5)(a) (VIC) Transfer of Land Act 1958 s 32(1A) (prohibits the issue of a certificate of title in respect of more than one non-contiguous lot, unless the Registrar believes there are special circumstances) (WA) Transfer of Land Act 1893 s 49. There are no equivalent provisions in South Australia.

9 (ACT) Land Titles Act 1925 s 44(2) (NT) Land Title Act 2000 s 44(1) (NSW) Real Property Act 1900 s 33(1) (Registrar-General may issue certificate of title) (QLD) Land Title Act 1994 s 42(1) (SA) Real Property Act 1886 ss 51B(d), 73, 74 (registered proprietor of an estate in freehold land entitled to receive a certificate; joint proprietors of an estate in land may receive one certificate for the entirety or each receive a separate certificate for their undivided share) (TAS) Land Titles Act 1980 s 33(8) (when a new folio is created, a certificate of title in respect of that land is created) (VIC) Transfer of Land Act 1958 s 27B(6) (Registrar must deliver each certificate of title to the person entitled to it) (WA) Transfer of Land Act 1893 s 48B (duplicate certificate). 10 (NSW) Real Property Act 1900 s 33(5), 33(6).11 (NT) Land Title Act 2000 s 44(2) (QLD) Land Title Act 1994 s 42(2). See mortgages and securities [295-2500], [295-2535], [295-2545], [295-2590]. 12 (NT) Land Title Act 2000 s 44(3) (QLD) Land Title Act 1994 s 42(3). The paragraph below is current to 16 June 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [355-8030] Status of the certificate of title The status of the certificate of title that is issued to the registered proprietor varies between jurisdictions. In most jurisdictions, the legislation provides that the certificate (including, where relevant, the computer folio or certificate) is conclusive evidence that the person named therein is the proprietor of the estate referred to.1 The aim is that after receiving a certificate of title, a registered proprietor can throw away any other proof of title and not be called upon again to establish right to ownership.2 Additionally, in the Northern Territory and Queensland, when a certificate of title is issued it is conclusive evidence of the indefeasible title created by the recording of the particulars of the relevant lot in the Register3 subject only to fraud on the part of the registered proprietor,4 other specified statutory exceptions,5 and any discrepancy between the certificate and the indefeasible title.6 The courts have upheld the status of the certificate of title as conclusive evidence of title and as crucial to the integrity of the Torrens system,7 particularly in their acceptance of immediate indefeasibility. 8 However, the efficacy of a registered dealing to create an interest according to its terms is not affected by an incorrect description of its contents on the certificate of title, and to that extent, the conclusiveness of the certificate of title standing alone is compromised.9 Notes 1 (ACT) Land Titles Act 1925 ss 52, 53(3)

(NT) Land Title Act 2000 s 47 (NSW) Real Property Act 1900 s 40(1) (manual folio), 40(1A) (computer folio) (QLD) Land Title Act 1994 s 46 (SA) Real Property Act 1886 s 51A (TAS) Land Titles Act 1980 s 39 (VIC) Transfer of Land Act 1958 ss 27D(5) (provides that the certificate of title is evidence as at date of the certificate), 41 (provides that the folio of the Register is conclusive evidence) (WA) Transfer of Land Act 1893 s 63. 2 Hamilton v Iredale (1903) 3 SR (NSW) 535 at 548; 20 WN (NSW) 164 per Owen J, SC(NSW), Full Court.3 (NT) Land Title Act 2000 ss 39, 47 (QLD) Land Title Act 1994 ss 37, 46. 4 (NT) Land Title Act 2000 ss 47(1)(a), 188(3)(b) (QLD) Land Title Act 1994 ss 46(a), 184(3)(b). As to fraud see [355-8190]. 5 (NT) Land Title Act 2000 ss 47(1)(a), 189 (QLD) Land Title Act 1994 ss 46(a), 185. 6 (NT) Land Title Act 2000 s 47(1)(b) (QLD) Land Title Act 1994 s 46(b). As to the principle of indefeasibility see [355-8155]-[355-8185]. 7 Dabbs v Seaman (1925) 36 CLR 538; 26 SR (NSW) 291; 31 ALR 402; BC2500019 ; Fels v Knowles (1906) 26 NZLR 604 ; Waimiha Sawmilling Co Ltd (in liq) v Waione Timber Co Ltd [1926] AC 101 .8 As to deferred and immediate indefeasibility see [355-8160].9 Bursill Enterprises Pty Ltd v Berger Bros Trading Co Pty Ltd (1971) 124 CLR 73; [1971] ALR 551; (1971) 45 ALJR 203 ; Morton v Black (1988) 83 ALR 182; 12 IPR 408; (1988) ANZ ConvR 558; (1988) ASC 55-675 ; Williamson v Diab [1988] 1 Qd R 210 at 212 per Connelly J. See also Parramore v Duggan (1995) 183 CLR 633 (reference to an easement in certificate of title of dominant land). As to power to correct errors see [355-8055]. As to misdescribed easements or wrong descriptions see [355-8215], [355-8220]. The paragraph below is current to 16 June 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [355-8035] Replacement of certificate of title A certificate of title that has been lost or destroyed may be replaced on application of the registered proprietor. The application must be supported by evidence required by the Registrar.1 Some jurisdictions make specific provision for replacement of a lost or destroyed registered instrument or dealing.2 The Registrar cannot be required to issue a new certificate where there is evidence that the previous certificate has not

been lost or destroyed.3 The Family Court of Australia has no power to interfere with the Registrar in the exercise of the statutory discretion to issue a new certificate of title under the Torrens legislation.4 Notes 1 (ACT) Land Titles Act 1925 ss 62, 62A (for replacement if in poor condition) (NSW) Real Property Act 1900 s 111 (SA) Real Property Act 1886 s 79 (TAS) Land Titles Act 1980 s 35(1) (VIC) Transfer of Land Act 1958 s 31(1) (WA) Transfer of Land Act 1893 ss 75(1) (new certificate), 75(1)(a) (new duplicate), 74B (subsequent duplicate), 74A (substitute certificate) . There are no equivalent provisions in the Northern Territory or Queensland. See, however: (NT) Land Title Act 2000 ss 44(1) (Registrar-General must issue certificate of title on written request of registered owner), 45(1)(b) (Registrar-General may issue second certificate only if first certificate is cancelled) (QLD) Land Title Act 1994 ss 42(1) (Registrar must issue certificate of title on written request of registered owner), 44(b) (Registrar may issue second certificate only if first certificate is cancelled). 2 (ACT) Land Titles Act 1925 s 50A (duplicate memorandum of lease, mortgage or encumbrance) (NT) Land Title Act 2000 s 161 (QLD) Land Title Act 1994 s 163 (registered instrument) (TAS) Land Titles Act 1980 s 35(3)-(6) (folio of the Register or registered dealing forming part of the Register). There are no equivalent provisions in the other jurisdictions. 3 In the Marriage of Harrison (1978) 18 ALR 689; 4 Fam LR 18 .4 In the Marriage of Harrison (1978) 18 ALR 689; 4 Fam LR 18 . The paragraph below is current to 16 June 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [355-8036] Computerised or electronic conveyancing systems A very important development in the Torrens legislation has been the introduction of computerized automated title systems.1 The Torrens legislation provides that the Register may be kept in a variety of mediums, which may include electronic or computerized form.2 The National Electronic Conveyancing System (NECS) is a joint initiative of government and industry established to create an efficient and convenient way of completing property based

transactions and lodging land title dealings for registration.3 The NECS project aims to deliver, in each jurisdiction, a national e-conveyancing system with a single entry point, using each the business rules of jurisdiction.4 In March 2008, the Council of Australian Governments identified electronic conveyancing as one of its target areas of regulatory reform.5 In January 2010, it was announced that a government run company was established in NSW, Queensland and Victoria to develop and operate a new electronic conveyancing system which would allow the settlement of property transactions, the lodging of instruments with land registries, and the meeting of associated duty and tax obligations electronically.6 Notes 1 See Bradbrook A, MacCallum S and Moore A, Australian Real Property Law, 4th Ed, Lawbook Co, 2007 p 119-122.2 (ACT) Land Titles Act 1925 s 43(1) (NT) Land Title Act 2000 s 6 (NSW) Real Property Act 1900 s 31B(3) (QLD) Land Title Act 1994 s 8 (SA) Real Property Act 1886 s 51B (TAS) Land Titles Act 1980 s 33(3)(a) (VIC) Transfer of Land Act 1958 s 27(2) (WA) Transfer of Land Act 1893 s 48. 3 For the NECS website see http://www.necs.gov.au.4 For the NECS website see http://www.necs.gov.au.5 For the NECS website see http://www.necs.gov.au. For the further information on the NECS see http://www.lawcouncil.asn.au/.6 See http://www.lawcouncil.asn.au. See also the Media Release Law Council Welcomes E-Conveyancing Initiative dated 21 January 2010 where the Law Council President Glenn Ferguson states, The Law Council has been committed to the establishment of a national e-conveyancing system (NECS) since 2005 and has actively participated in its development. Todays announcement, made by the governments of NSW, Queensland and Victoria, marks a critical step in this process with the commitment of $5 million by the three states to accelerate this development. Enabling a lawyer in one state to conduct a property conveyance in another, electronically, has been one of the Law Councils aims through its involvement in the development of NECS. Speeding up the conveyancing process in this way will benefit clients and the economy. It is expected that new electronic conveyancing systems will be up and running by the end of 2011: E-conveyancing committed for Eastern states, Ben Abbott, Lawyers Weekly, 18 January 2010, http://www.lawyersweekly.com.au.

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(F) Registration of Interests and Dealings (I) Registrable Interests The paragraph below is current to 16 June 2010 For new cases see ACL Reporter To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [355-8115] Interests which may be registered or noted on the Register The Torrens system provides for the registration of interests in Torrens title land but only those interests that the legislation recognises as capable of registration, as not all interests in Torrens title land can be registered. It is clear that every interest that can be registered obtains the benefit of indefeasibility,1 but it is not so clear which interests can be registered and which cannot.2 The interests that can be registered vary between jurisdictions but include fees simple,3 life estates,4 easements,5 mortgages,6 leases,7 restrictive covenants,8 profits prendre,9 rentcharges,10 coownership interests,11 Crown Grants and Crown Leases.12 Similarly, possessory titles can also be brought under the Torrens system in some jurisdictions.13 Notes 1 As to indefeasibility generally see [355-8155]-[355-8185].2 Fels v Knowles (1906) 26 NZLR 604 at 620 per Edwards J. See also Waimiha Sawmilling Co Ltd (in liq) v Waione Timber Co Ltd [1926] AC 101 at 106, PC.3 (ACT) Land Titles Act 1925 ss 73-77 (NT) Land Title Act 2000 s 4 (definition of registered owner includes fee simple interest and Crown lease) (NSW) Real Property Act 1900 s 13A (fees simple purchased from the Crown) (QLD) Land Title Act 1994 s 4 (definition of registered owner) (SA) Real Property Act 1886 s 6 (definition of land)

(TAS) Land Titles Act 1980 s 11(1) (VIC) Transfer of Land Act 1958 ss 10(1), 45 (WA) Transfer of Land Act 1893 s 4 (definition of proprietor). As to fees simple see [355-95]. 4 (ACT) Land Titles Act 1925 s 56 (NT) Land Title Act 2000 s 56 (NSW) Real Property Act 1900 s 14(2)(b) (QLD) Land Title Act 1994 s 55 (SA) Real Property Act 1886 s 75 (recognizes remainder and reversion) (TAS) Land Titles Act 1980 ss 113-116 (primarily directed to entailed estates: see also (TAS) Estates Tail Act 1853) (VIC) Transfer of Land Act 1958 ss 10(1)(f), 45 (interest in land) (WA) Transfer of Land Act 1893 s 84. As to life estates see [355-110]. 5 (ACT) Land Titles Act 1925 s 103B (NT) Land Title Act 2000 s 91 (NSW) Real Property Act 1900 ss 46, 47 (QLD) Land Title Act 1994 s 82 (SA) Real Property Act 1886 s 81 (TAS) Land Titles Act 1980 s 105 (VIC) Transfer of Land Act 1958 s 72 (WA) Transfer of Land Act 1893 s 88A. As to easements see [355-12000]. 6 (ACT) Land Titles Act 1925 ss 73-78, 92, 103A(1)(b) (NT) Land Title Act 2000 s 74 (NSW) Real Property Act 1900 s 56 (QLD) Land Title Act 1994 s 72 (SA) Real Property Act 1886 s 128 (TAS) Land Titles Act 1980 ss 60, 72 (VIC) Transfer of Land Act 1958 s 74 (WA) Transfer of Land Act 1893 ss 82, 105, 106.

As to mortgages on Torrens title land see generally mortgages and securities [295-2500]-[2952590]. 7 (ACT) Land Titles Act 1925 ss 73-78, 82, 103A(1)(a) (NT) Land Title Act 2000 s 65 (NSW) Real Property Act 1900 s 53 (QLD) Land Title Act 1994 s 64 (SA) Real Property Act 1886 s 116 (TAS) Land Titles Act 1980 ss 60, 64 (VIC) Transfer of Land Act 1958 s 66 (WA) Transfer of Land Act 1893 ss 82, 119. As to registration of Torrens title leases see generally leases and tenancies [245-1050]. 8 (ACT) Land Titles Act 1925 s 103G (incorporeal right) (NT) Land Title Act 2000 ss 106-114 (NSW) Conveyancing Act 1919 s 88(3); (NSW) Real Property Act 1900 ss 3 (definition of land includes incorporeal right), 81 (QLD) Land Title Act 1994 s 97A (TAS) Land Titles Act 1980 s 102 (VIC) Transfer of Land Act 1958 s 88 (WA) Transfer of Land Act 1893 s 129A. There are no equivalent provisions in South Australia. However (SA) Real Property Act 1886 s 3 has a wide definition of land specifically referring to incorporeal hereditaments that includes covenants. As to restrictive covenants see generally [355-12524]. 9 (ACT) Land Titles Act 1925 s 103G (NT) Land Title Act 2000 s 118 (NSW) Real Property Act 1900 ss 46, 47 (QLD) Land Title Act 1994 s 97E (SA) Real Property Act 1886 ss 3 (definition of easement includes profit prendre), 81 (TAS) Land Titles Act 1980 s 107 (VIC) Transfer of Land Act 1958 s 45 (interest in land) (WA) Transfer of Land Act 1893 s 81R.

As to profits prendre see generally [355-12255]-[355-12265]. 10 (ACT) Land Titles Act 1925 s 92 (NSW) Real Property Act 1900 ss 56, 60; see generally ibid Pt 7 Div 3. (SA) Real Property Act 1886 ss 128, 137 (TAS) Land Titles Act 1980 ss 72(b), 82 (VIC) Transfer of Land Act 1958 ss 74, 75 (WA) Transfer of Land Act 1893 ss 105, 111. There are no equivalent provisions in the Northern Territory and Queensland. As to rent charges see generally [355-12270]. 11 (ACT) Land Titles Act 1925 ss 54, 79 (NT) Land Title Act 2000 ss 57-59 (NSW) Real Property Act 1900 s 99 (QLD) Land Title Act 1994 s 56 (SA) Real Property Act 1886 ss 74, 111 (TAS) Land Titles Act 1980 s 63 (provides for the severance of joint tenancy and by implication contemplates the registration of co-ownership interests) (VIC) Transfer of Land Act 1958 s 30(2) (WA) Transfer of Land Act 1893 s 84. As to co-ownership interests see generally see [355-11500]. 12 (ACT) Land Titles Act 1925 s 70 (NT) Land Title Act 2000 s 48 (NSW) Real Property Act 1900 ss 13A (fees simple purchased from the Crown), 13B (perpetual Crown Leases), 13D (other Crown Land) (QLD) Land Title Act 1994 s 47 (State grants) (SA) Real Property Act 1886 ss 26 (Crown grant), 93 (Crown lease) (TAS) Land Titles Act 1980 ss 9 (Crown lands alienated in fee), 10 (VIC) Transfer of Land Act 1958 s 29 (registration of Crown land) (WA) Transfer of Land Act 1893 ss 81A-81C. As to Crown land see [355-13500]-[355-13610]. 13 (NSW) Real Property Act 1900 ss 45D, 45E (QLD) Land Title Act 1994 ss 99, 108 (SA) Real Property Act 1886 ss 80A-80I

(TAS) Land Titles Act 1980 ss 138D (purchaser in possession), 138T (VIC) Transfer of Land Act 1958 ss 60-62 (WA) Transfer of Land Act 1893 s 222. There are no equivalent provisions in the Australian Capital Territory and Northern Territory. As to possessory title see limitation of actions [255-235]. The paragraph below is current to 16 June 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [355-8120] Noting interests on the Register It is possible for interests in Torrens title land to be noted on the Register either directly or by way of caveat, in which case the interest does not receive the full benefits of indefeasibility that is accorded to registered interests, and for the purposes of resolving priority disputes it is treated as unregistered.1 In Queensland, it is possible to deposit a settlement notice that, whilst not gaining the benefits of indefeasibility, does prevent registration of instruments. A similar right exists in Tasmania, referred to as a priority notice. These notices give limited protection to persons such as purchasers.2 Some interests or rights may not be noted on the Register for instance, most jurisdictions provide that trusts may not be noted on the Register.3 However, in most jurisdictions, trust instruments may be lodged with the Registrar for safe custody and, in the Australian Capital Territory and New South Wales, the Registrar is required to record a caveat forbidding the registration of any instrument not in accordance with the trust provisions in so far as it affects the land affected by the trust.4 In Tasmania, the Recorder may describe a registered proprietor as a trustee, but must not include particulars of the trust.5 In the Northern Territory and Queensland, a person may be registered as a trustee of an interest.6 Notes 1 (ACT) Land Titles Act 1925 s 6 (caveat not an instrument), 48 (NT) Land Title Act 2000 ss 181, 184, 185 (NSW) Real Property Act 1900 ss 41, 42, 74G (QLD) Land Title Act 1994 s 178 (SA) Real Property Act 1886 ss 56, 57 (TAS) Land Titles Act 1980 s 40 (VIC) Transfer of Land Act 1958 ss 34, 40-42 (WA) Transfer of Land Act 1893 ss 58, 68. As to the nature and purpose of caveats see [355-8240]. As to priority disputes over mortgages see mortgages and securities [295-3500]-[295-3565]. 2 (QLD) Land Title Act 1994 Pt 7A (TAS) Land Titles Act 1980 s 52.

3 (ACT) Land Titles Act 1925 s 124(1) (NSW) Real Property Act 1900 s 82 (SA) Real Property Act 1886 s 162 (TAS) Land Titles Act 1980 s 132 (VIC) Transfer of Land Act 1958 s 37 (WA) Transfer of Land Act 1893 s 55. There are no equivalent provisions in the Northern Territory and Queensland. 4 (ACT) Land Titles Act 1925 s 124(4) (NSW) Real Property Act 1900 s 82(3) (SA) Real Property Act 1886 s 162 (VIC) Transfer of Land Act 1958 s 37 (no obligation to lodge a caveat) (WA) Transfer of Land Act 1893 s 55. There are no equivalent provisions in the Northern Territory, Queensland and Tasmania. As to the Registrars power to lodge caveats see [355-8260]. 5 (TAS) Land Titles Act 1980 s 132(3).6 (NT) Land Title Act 2000 s 125 (QLD) Land Title Act 1994 s 109. The paragraph below is current to 16 June 2010 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [355-8125] Creation of future interests The Torrens legislation generally allows the registered proprietor of land to create future interests and powers of appointment1 as well as execute powers of appointment by registering a transfer form that may be modified if necessary.2 In Tasmania and Victoria, this right is conferred by the general conveyancing statutes rather than by the Torrens legislation.3 These provisions overcame the general law difficulty involved in the conveyance of interests to oneself or, prior to the Married Womens Property Acts,4 to ones wife. Where the future interest created is vested rather than contingent, then there is no reason why the Registrar should not create a separate title interest.5 Notes 1 As to interests in land see [355-1]-[355-210].2 (ACT) Land Titles Act 1925 s 79 (NT) Land Title Act 2000 s 56 (life interests and remainders) (QLD) Land Title Act 1994 s 55 (life interests and remainders) (SA) Real Property Act 1886 s 75

(WA) Transfer of Land Act 1893 s 84. 3 (TAS) Conveyancing and Law of Property Act 1884 s 62 (VIC) Property Law Act 1958 s 19. 4 Legislation similar to the (UK) Married Womens Property Act 1882 has been enacted in most Australian jurisdictions: (ACT) Married Persons Property Act 1986 (NT) Married Persons (Equality of Status) Act 1989 (NSW) Married Persons (Equality of Status) Act 1996 (QLD) Property Law Act 1974 ss 14, 15 (SA) Law of Property Act 1936 ss 92-111 (TAS) Married Womens Property Act 1935 (VIC) Marriage Act 1958 (WA) Married Womens Property Act 1892 (repealed). 5 (NSW) Real Property Act 1900 s 14(2)(b) (SA) Real Property Act 1886 s 75 (TAS) Land Titles Act 1980 s 33(6)(c). There are no equivalent provisions in the other jurisdictions. However, the (ACT) Land Titles Act 1925 s 18(2)(b) provides that persons entitled to the remainder or reversion are required to join in the application for registration of the life estate or lease.

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(C) Assets Test (I) Value of Assets The paragraph below is current to 28 July 2008 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [380-4410] Particular assets to be disregarded In calculating the value of a persons assets 1 for the purposes of assets testing under the (CTH) Social Security Act 1991 (the Act),2 certain assets must be disregarded, including:3 (1) if the person is not a member of a couple the value of any right or interest of the person in the persons principal home4 that is a right or interest that gives the person reasonable security of tenure5 in the home; (2) if the person is a member of a couple the value of any right or interest of the person in one residence that is the principal home of the person, the persons partner or both of them that is a right or interest that gives the person or the persons partner reasonable security of tenure in the home; (3) the value of any life interest of the person other than specified life interests; (4) the value of any asset test exempt income stream of the person; (5) half the value of any partially asset-test exempt income stream of the person;6 (6) any amount received by the person within the immediately preceding period of 90 days and which is excluded from the definition of income;7 (7) the value of the persons investment in a superannuation fund, approved deposit fund, deferred annuity or an ATO small superannuation account until the person reaches pension

age or starts to receive a pension or annuity out of the fund;8 (8) the value of a persons investment in a first home saver account;9 (9) the value of a granny flat interest10 obtained before a specified date where a person has such an interest in his or her principal home which gives the person reasonable security of tenure in the home, or where the person is a person to whom particular provisions regarding special residences and special residents apply;11 (10) the value of any right or interest of the person in a sale leaseback home if the person is a sale leaseback resident to whom particular provisions regarding special residences and residents apply;12 (11) the value of any contingent, remainder or reversionary interest of the person (other than an interest created by the person, by the persons partner or by both of them); (12) the value of any assets (other than a contingent, remainder or reversionary interest) to which the person is entitled from the estate of a deceased person but which has not been, and is not able to be, received; (13) the value of any medal or other decoration awarded (whether to the person or another person) for valour that is owned by the person otherwise than for the purposes of investment or a hobby; (14) the value of (a) any cemetery plot acquired by the person for the burial of the person or the persons partner, and (b) any funeral expenses paid in advance by the person in respect of the funeral of the person or the persons partner; (15) an amount invested in an exempt funeral investment13 and any return on that investment; (16) the value of personal property designed or modified for use by a disabled person where the person, the persons partner, a dependent child of the person or a dependent child of

the persons partner is disabled; (17) the value of a motor vehicle provided to a person under the scheme administered by the Commonwealth known as the gift car scheme; (18) if the person has sold a residence that was the principal home of the person on terms and has purchased, also on terms, another residence that is the principal home of the person so much of the balance due to the person in respect of the sale as will be applied by the person in respect of the purchase of the other residence; (19) the amount of any insurance or compensation payments received by the person because of any loss or damage to buildings, plant or personal effects within the immediately preceding 12 months or such longer period as the Secretary determines for any special reason for a particular payment; (20) the value of any native title rights and interests of the person, or of a community or group of which the person is a member;14 (21) the amount of any accommodation bond balance in respect of an accommodation bond paid by the person.15 If a person sells his or her principal home and is likely, within 12 months, to apply the whole or a part of the proceeds of the sale in acquiring another residence that is to be his or her principal home, so much of the proceeds of the sale as the person is likely to apply in acquiring the other residence is to be disregarded during that period for the purposes of calculating the value of the persons assets.16 Furthermore, if: (1) the value of any assets of a person or, if the person is a member of a couple, of the person and the persons partner, that consists of the contents of a principal home and of other personal effects that are used primarily within the principal home does not exceed $10,000; and (2) the assets are used primarily for private or domestic purposes, the value of the assets is taken to be $10,000 unless the person satisfies the Secretary that the value of the assets is less than $10,000.17 Notes 1 Asset is defined, for the purposes of social security law assets tests, to mean property or money whether inside or outside Australia ((CTH) Social Security Act 1991 s 11(1)) but property itself is not defined. Equitable interests in property will, for example, be relevant and must be taken into account: see Kintominas v Secretary, Dept of Social Security (1991) 30 FCR 475; 103 ALR 82; 14 AAR 81 (property owned by the applicant in relation to which her son had acquired

an equitable entitlement to the whole property should not have been considered property in the applicants hands for the purposes of the assets test). Failure to consider such an issue may constitute an error of law: Kidner v Secretary, Dept of Social Security (1993) 31 ALD 63 (oral agreement for sale of land by applicant to his sons, under which the sons part performed in reliance on the contract, should have been considered, as should the issue of whether or not a constructive trust could have existed). See also Baumgartner v Baumgartner (1987) 164 CLR 137; 76 ALR 75; 11 Fam LR 915; BC8701827 (constructive trust). Loans and debts are also considered a species of property which are capable of ownership: Secretary, Department of Family and Community Services v Draper (2003) 79 ALD 394; 38 AAR 119; [2003] FCA 1409; BC200308633 .2 As to whether a particular social security entitlement has an asset test see generally [380-4075]-[380-4310] (provisions of the various benefits and allowances). As to disposal of assets for the purposes of social security law see [380-4415], [380-4420].3 (CTH) Social Security Act 1991 s 1118(1). Note that this provision does not apply to the calculation of a persons assets under ibid ss 198F-198MA (carer payment), 1076-1084A (deemed income from financial assets), 1125 (disposal of assets by individuals), 1126 (disposal of assets by members of couples), 1133 (qualification for participation in pension loans scheme), 1135A (pension loans scheme creation of debt). See also ibid s 1118(4).4 For the meaning of principal home see ibid s 11A. See also Re Di Primio and Dept of Social Security (1993) 31 ALD 233 (a persons principal home is not limited to a dwelling-house, flat or unit, nor is it to be identified by reference to physical boundaries or walls but by reference to the activities which a person undertook in carrying out his or her domestic or recreational activities. For the purpose of identifying a persons principal home it is insignificant that the use of the premises for residential purposes is illegal); Re Secretary, Department of Family and Community Services and Gledich (2005) 87 ALD 503; [2005] AATA 598 ; BC200508546 (status of a principal home even though the person is not there from time to time); Re Vines and Secretary, Dept of Employment and Workplace Relations [2006] AATA 911 ; BC200608569 .5 For the meaning of reasonable security of tenure see (CTH) Social Security Act 1991 s 11A(10).6 For the meaning of partially asset-test exempt income stream see ibid s 1118(1A).7 That is, excluded under the definition of income in ibid s 8(1) by ibid s 8(4), 8(5): ibid s 1118(1)(e)(ii).8 Superannuation fund, approved deposit fund, deferred annuity and ATO small superannuation account are defined in ibid s 9(1). Pension age is defined in ibid s 23(5A)-(5D). See also ibid s 1118B (value of superannuation assets determined by Minister to be disregarded).9 (CTH) First Home Saver Accounts Act 2008 s 8 (definition of FHSA or first home saver account).10 For the meaning of granny flat interest see ibid s 12A(2).11 That is, ibid ss 1150(2), 1151(2), 1152(2), 1152(5), 1153(2), 1154(2), 1155(2), 1156(2), 1157(2): ibid s 1118(1)(ga)(ii). See also ibid s 1145A.12 That is, ibid ss 1150(2), 1151(2), 1152(2), 1152(5), 1153(2), 1154(2), 1155(2), 1156(2), 1157(2).13 For the meaning of exempt funeral investment see ibid s 19E.14 Native title rights and interests means: (1) native title rights and interests within the meaning of (CTH) Native Title Act 1993 s 223; and (2) any rights and interests of a similar nature under any law of a State, Territory or foreign country (whether or not the rights and interests relate to land or waters outside Australia), but does not include any right or interest in a lease or licence, or in a freehold estate: (CTH) Social Security Act 1991 s 1118(1A).15 Ibid s 1118(1)(u). See also ibid s 1118AB (where the total value of the persons assets is reduced by the persons exempt bond amount, as defined by ibid s 1099H).16 Ibid s 1118(2). Note that this provision does not apply to the calculation of the value of a persons assets for the purposes of ibid ss 1076-1084A (deemed income from financial assets), or ibid ss 198F-198MA (carer payment), 1123-1128 (disposal of assets): ibid s 1118(2), 1118(2A). Note that the Secretary may determine in writing that the period be extended to 24 months under certain circumstances: ibid s 1118(2B).17 Ibid s 1118(3).

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(B) Rules of Construction The paragraph below is current to 20 September 2007 [395-915] Expressed intention of the testator The duty of the court of construction is to ascertain the testators intention by construing the language of the will.1 It is the actual words used by the testator which constitute the testators expressed intention, not what the testator meant to do.2 Thus, it is the written words of the instrument which determine the meaning of the instrument.3 Where the intention of the testator is unclear, the court may use a variety of rules of construction to resolve the ambiguity.4 The court is not permitted to re-write the will so as to produce a more logical or rational result, but may only give effect to the actual dispositions made in the testamentary instrument.5 Notes 1 Perrin v Morgan [1943] AC 399 at 406; [1943] 1 All ER 187 per Viscount Simon LC; Fell v Fell (1922) 31 CLR 268; 29 ALR 31 . As to the court of construction see further [395-910].2 Perrin v Morgan [1943] AC 399 at 406; [1943] 1 All ER 187 per Viscount Simon LC; Fell v Fell (1922) 31 CLR 268; 29 ALR 31 . See also Davis v Adventist Development and Relief Agency [2006] NSWSC 876; BC200607167 ; Abbs v Abbs [2003] NSWSC 1202; BC200307730 ; Firriolo v Firriolo [2000] NSWSC 1039; BC200006803 ; Public Trustee (Qld) v Roberts [2004] QSC 199; BC200403956 ; Lewis v Lohse [2003] QCA 199; BC200302360 ; Lewis v Lohse [2002] QSC 204; BC200204035 ; In the matter of Zimmerman [1999] QSC 15; Hood v A-G

(WA) [2006] WASC 157; BC200606471 ; Wallis v Miller [2006] WASC 7; BC200600116 ; Re Kuzma; ex parte Public Trustee [2002] WASC 303; BC200207695 ; Estate of Hudson (decd) [2002] WASC 146; BC200203119 ; Borlaug v University of Western Australia [2001] WASCA 425; BC200108157 ; Thomas v Strickland [2001] WASC 156; BC200103203 .3 Perrin v Morgan [1943] AC 399 at 406; [1943] 1 All ER 187 per Viscount Simon LC; Fell v Fell (1922) 31 CLR 268; 29 ALR 31 ; Pearce v Wright (1926) 26 SR (NSW) 515 at 521 per Long Innes J (affirmed Pearce v Wright (1926) 39 CLR 16 ); Re Petersen (decd); Petersen v Petersen [1920] St R Qd 42 at 52 per S0hand J, SC(QLD), Full Court; Ballard v Pick (1920) 20 SR (NSW) 223 at 227-8 per Harvey J; McRobert v McRobert (1920) 27 CLR 331 at 333 ; Roddy v Fitzgerald (1858) 6 HL Cas 823 at 876; 10 ER 1518 at 1539 per Lord Wensleydale; Perpetual Trustee Co Ltd v Archbold (1946) 46 SR (NSW) 327; 63 WN (NSW) 159 , SC(NSW), Full Court. As to the position where there is an error in the instrument see [395-910].4 See [395920]-[395-990].5 Pearce v Wright (1926) 26 SR (NSW) 515 at 521 per Long Innes J (affirmed Pearce v Wright (1926) 39 CLR 16 ); Re Petersen (decd); Petersen v Petersen [1920] St R Qd 42 at 52 per Shand J, SC(QLD), Full Court; Ballard v Pick (1920) 20 SR (NSW) 223 at 227 per Harvey J; McRobert v McRobert (1920) 27 CLR 331 at 333 ; Re Mackay (decd) (1915) 17 GLR 570; Simpson v Foxon [1907] P 54 at 57; (1906) 76 LJP 7; 96 LT 473 per Sir Gorrell Barnes; Scale v Rawlins [1892] AC 342 at 344 per Lord Halsbury LC; Abbott v Middleton (1858) 7 HL Cas 68 at 114; 11 ER 28 at 46 per Lord Chelmsford. See further [395-910]. The paragraph below is current to 20 September 2007 [395-920] Will to be construed as a whole The entirety of the will is to be examined when ascertaining the testators intentions and not just a specific part or portion of the will which has created a doubt or ambiguity as to the true meaning of the will.1 Where a will has been altered by codicils, the will and the codicils are read together.2 The construction of the will as a whole may have the effect of solving ambiguities in words that are unclear,3 or may demonstrate that a word which appeared to have one meaning when read on its own should have a different meaning in the context of the entire will.4 Notes 1 Perpetual Trustee Co Ltd v McKendrick [1973] 2 NSWLR 784 at 792 per Mahoney J; Towns v Wentworth (1858) 11 Moo PCC 526; 14 ER 794 ; Crumpe v Crumpe [1900] AC 127; (1900) 82 LT 130 ; Brennan v Permanent Trustee Co of New South Wales Ltd (1945) 73 CLR 404; [1945] ALR 411; (1945) 19 ALJ 200 .2 Hawkins v Perpetual Trustee Co Ltd (1960) 103 CLR 135; [1960] ALR 642; (1960) 34 ALJR 218 .3 Re Haygarth; Wickham v Haygarth [1913] 2 Ch 9; (1913) 108 LT 756 .4 Re Haygarth; Wickham v Haygarth [1913] 2 Ch 9; (1913) 108 LT 756 . This may involve a rebuttal of the presumption that words in a will have their usual or technical meaning: Re Haygarth; Wickham v Haygarth [1913] 2 Ch 9; (1913) 108 LT 756 ; Re McBean (decd) (1973) 7 SASR 579 . See further [395-925]. The paragraph below is current to 20 September 2007 [395-925] Usual meaning rule The usual meaning rule requires the court to interpret words and phrases in a will in the context of the whole of the will read together,1 according to their usual, primary or technical meaning.2 If the passage of time has caused an alteration in the usual meaning of a word or phrase, the usual meaning is ascertained at the date the will was executed.3 Where the meaning of a word or phrase is clear and capable of application by reference to the surrounding circumstances of the testator then, with certain qualifications,4 no evidence may be led to show that the testator used the word or phrase in a manner other than according to its ordinary or usual meaning.5 Words which have acquired a settled meaning in the courts will prima facie be given that meaning.6 The usual meaning rule will not be displaced merely because a provision in a will appears arbitrary, capricious or eccentric.7

The usual meaning rule is qualified in its application by: (1) the dictionary principle;8 (2) the armchair principle;9 (3) words having more than one meaning;10 and (4) customary usage.11 Notes 1 As to construction of the will as a whole see [395-920].2 Allgood v Blake (1873) LR 8 Ex 160 at 163; 29 LT 331 per Blackburn J; Lutheran Church of Australia South Australia District Inc v Farmers Co-op Executors and Trustees Ltd (1970) 121 CLR 628; [1970] ALR 545; (1970) 44 ALJR 176 . As to technical words and phrases see [395-945].3 Perrin v Morgan [1943] AC 399; [1943] 1 All ER 187 . Note that republication of a will alters the wills date of execution: see [395760]. As to the date of execution see [395-290].4 See notes 8-11 below.5 Re Cuthbertson; Cuthbertson v Cuthbertson 1979 Tas R 93; Re Atkinsons Will Trusts; Atkinson v Hall [1978] 1 All ER 1275; [1978] 1 WLR 586 at 590 per Megarry VC; Re Rowlands (decd) [1973] VR 225 ; Re Bell (decd) [1969] VR 597 ; Re Hackett (decd) [1966] VR 232 ; Re Edwards (decd) [1964] VR 551 at 553 per Herring CJ; Hulks v Wills (1949) 50 SR (NSW) 74; 67 WN (NSW) 79 ; Perpetual Trustee Co Ltd v Archbold (1946) 46 SR (NSW) 327; 63 WN (NSW) 159 , SC(NSW), Full Court; Re Robertson [1942] VLR 137 ; Re Grazebrook; Chase v Layton [1928] VLR 75; (1927) 49 ALT 261 ; Pearce v Wright (1926) 26 SR (NSW) 515 (affirmed Pearce v Wright (1926) 39 CLR 16 ); Re Petersen (decd); Petersen v Petersen [1920] St R Qd 42 ; Re Goodes (1902) SALR 86 at 91 per Way CJ; Robinson v Gould (1886) 8 ALT 38.6 Re Cox (decd) [1967] Qd R 173 ; Re Motion; New Zealand Insurance Co Ltd v Hargraves [1960] NZLR 921 ; Re Hogarth (decd) [1935] St R Qd 211 ; Re Smith [1933] Ch 847 ; Re Harcourt; Portman v Portman [1921] 2 Ch 491 at 503 per Lord Sterndale (affirmed Portman v Portman [1922] 2 AC 473; (1922) 128 LT 129 ); Hamilton v Ritchie [1894] AC 310 at 313 per Lord Watson; Leach v Jay (1878) 9 Ch D 42 . See further [395-940].7 Re Jamess Will Trusts; Peard v James [1962] Ch 226; [1960] 3 All ER 744 ; Bird v Luckie (1850) 8 Hare 301 at 306; 68 ER 375 .8 See [395-930].9 See [395-935].10 Most words have more than a single meaning, and the circumstances in which the testator uses those words determines what meaning the court will attribute to them in each particular case: Charter v Charter (1874) LR 7 HL 364. See further [395940], [395-945].11 See [395-950]. The paragraph below is current to 20 September 2007 [395-930] Dictionary principle Under the dictionary principle, where a testator has provided his or her own definitions for the words in the will, the court will interpret the words or phrases in the will in accordance with those definitions.1 The clearest application of the principle occurs where the testator includes an express definition clause in the will.2 However, the principle will also apply where the testator clearly uses a word or phrase in a different sense from its usual meaning.3 In applying the principle, the meaning of a word or phrase must be construed in the context of the will as a whole, and not in isolation.4 Notes

1 Walker v Landenberger (1937) 37 SR (NSW) 201 at 213 per Long Innes CJ; Re Mitchell (decd); Ballarat Trustees Executors and Agency Co Ltd v National Trustees, Executors & Agency Co of Australasia Ltd [1929] VLR 95; [1929] ALR 108 ; Public Trustee v Leslie [1917] NZLR 841 ; In the Will of Thomas [1915] VLR 141 , SC(VIC), Full Court; Joy v Curator of the Estates of Deceased Persons (1895) 21 VLR 620; 1 ALR 109 ; Hill v Crook (1873) LR 6 HL 265; [1874-80] All ER Rep 62 .2 Re Davidson (decd); National Provincial Bank Ltd v Davidson [1949] Ch 670; [1949] 2 All ER 551 ; Re Helliwell; Pickles v Helliwell [1916] 2 Ch 580; (1916) 115 LT 478 .3 Trustees, Executors & Agency Co Ltd v Johnston [1970] VR 587 ; In the Will of Moyle (decd); Howie v Moyle [1920] VLR 147; (1920) 26 ALR 70 ; Re Viney (1917) 13 Tas LR 72 . As to the usual meaning rule see [395-925].4 Re Griffiths (decd) (1980) 23 SASR 358 at 361 per Walters J; Public Trustee v Young (1980) 23 SASR 239 at 247 per Jacobs J; Perrin v Morgan [1943] AC 399 at 418; [1943] 1 All ER 187 per Lord Russell; Crumpe v Crumpe [1900] AC 127; (1900) 82 LT 130 ; Martin v Lee (1861) 14 Moo PCC 142; 4 LT 657; 15 ER 259 . As to construction of a will as a whole see [395-920]. The paragraph below is current to 20 September 2007 [395-935] Armchair principle The armchair principle enables the court to give meaning and effect to a will in which the words used may be clear but have no application or discernible meaning with reference to surrounding circumstances.1 It has been held that armchair evidence may also be used to show an ambiguity, even if the words in the will are clear.2 The principle is termed the armchair principle3 because the will is interpreted as if the court was sitting in the testators armchair looking at the will from his or her viewpoint or perspective.4 Under the armchair principle, the court may admit for examination extrinsic evidence about the testators property and his or her family, acquaintances and friends for the purpose of putting the court in a position to read the will as the testator himself or herself would read it.5 However, the court may not admit direct evidence of the testators intention.6 Armchair evidence may reveal a doubt as to the meaning of the words in a will and the court must determine whether the words have their usual and ordinary meaning7 or whether their meaning is modified by the extrinsic evidence.8 The court will first construe the will according to the ordinary meaning of the words used; if necessary, look at the surrounding circumstances,9 then check the testators situation against the words in the will as they are construed.10 Notes 1 Higgins v Dawson [1902] AC 1; [1900-3] All ER Rep Ext 1470 ; Layer v Burns Philp Trustee Co Ltd (1986) 6 NSWLR 60 , CA(NSW); Harris v Ashdown (1985) 3 NSWLR 193 , CA(NSW); Re Gibb [1984] 1 NZLR 708 , HC(NZ); Re Jebb (decd); Ward-Smith v Jebb [1966] Ch 666; [1965] 3 All ER 358; [1965] 3 WLR 810 , CA.2 Re Smalley; Smalley v Scotton [1929] 2 Ch 112 ; Layer v Burns Philp Trustee Co Ltd (1986) 6 NSWLR 60 , CA(NSW); Harris v Ashdown (1985) 3 NSWLR 193 , CA(NSW); Re Gibb [1984] 1 NZLR 708 , HC(NZ); Re Jebb (decd); Ward-Smith v Jebb [1966] Ch 666; [1965] 3 All ER 358; [1965] 3 WLR 810 , CA.3 The expression was first used in Boyes v Cook (1880) 14 Ch D 53 at 56 per James LJ.4 Re Bell (decd); Bell v Bell [1964] NZLR 912 , CA(NZ); In the Will and Codicil of Padbury; Home of Peace for the Dying and Incurable v Solicitor-General (WA) (1908) 7 CLR 680; 15 ALR 77 ; Hendry v Perpetual Executors and Trustees Assn of Australia Ltd (1961) 106 CLR 256; [1962] ALR 249; (1961) 35 ALJR 151 ; Re Edwards (decd); Turner v Roberts [1981] VR 794 ; Re Heidenreich; Cole v Heidenreich (1981) 27 SASR 455 ; Public Trustee v Young (1980) 23 SASR 239 at 245 per Jacobs J; Re Beames (decd); Pearce v Beames (1979) 22 SASR 595 ; Re McBean (decd) (1973) 7 SASR 579 at 582 per Sangster J; Re Hillier (decd) (1971) 1 SASR 140 ; Re Bell (decd) [1969] VR 597 ; Re Bowcock (decd); Box v Bowcock [1968] 2 NSWR 697 ; Re Carrigan (decd) [1967] Qd R 379 ; Re Cox (decd) [1967] Qd R 173 ; Re

Fowler (decd) [1963] VR 639 ; Re Carson (decd); Carson v Presbyterian Church of Queensland [1956] St R Qd 466 , SC(QLD), Full Court; Re Thomson [1956] SASR 188 , SC(SA), Full Court; Re Tait (decd); Rumsby v Cowan [1953] SASR 263 at 267 per Ligertwood J; In the Estate of Playfair (decd) [1946] SASR 110 ; Re Minton; Public Curator v Toohey [1939] St R Qd 159 ; Walker v Landenberger (1937) 37 SR (NSW) 201 ; Ballard v Pick (1920) 20 SR (NSW) 223 .5 Layer v Burns Philp Trustee Co Ltd (1986) 6 NSWLR 60 , CA(NSW); Harris v Ashdown (1985) 3 NSWLR 193 , CA(NSW); Re Gibb [1984] 1 NZLR 708 , HC(NZ); Re Jebb (decd); Ward-Smith v Jebb [1966] Ch 666; [1965] 3 All ER 358; [1965] 3 WLR 810 , CA. As to the admission of extrinsic evidence generally see [395-995]-[395-1005].6 At common law, direct evidence of the testators intention may only be admitted in the case of equivocations: see [3951000]. As to statutory provisions in this area see [395-1005].7 As to the usual meaning of words in a will see [395-925].8 National Society for Prevention of Cruelty to Children v Scottish National Society for Prevention of Cruelty to Children [1915] AC 207; (1915) 111 LT 869 . The distinction between words or phrases in a will that are clear and sensible and those that are insensible is a fine one: Re Bell (decd); Bell v Bell [1964] NZLR 912 , NZ(CA). The concept of doubt when applied to the meaning of the words used in the testamentary instrument and looked at with the hindsight of extrinsic or armchair evidence is not always conclusive: Re Charleson (decd) [1968] VR 252 at 256 per Starke J; Reishiska v Cody (1967) 62 WWR 581; Re Cox (decd) [1967] Qd R 173 ; Marchuk v Marchuk (1965) 52 WWR 652; Re Wood (decd) [1952] VLR 450 ; Re Foley; Channell v Foley (1952) 53 SR (NSW) 31; 70 WN (NSW) 1 ; Walker v Petrie (1936) 53 WN (NSW) 155 ; Re Grazebrook; Chase v Layton [1928] VLR 75; (1927) 49 ALT 261 ; In the Will of Barnett; Bradbury v Barnett [1919] VLR 524; (1919) 25 ALR 289 .9 Re Hodgson; Nowell v Flannery [1936] Ch 203 at 206; [1935] All ER Rep 161 per Farwell J.10 Re Edwards (decd); Turner v Roberts [1981] VR 794 ; Executor Trustee and Agency Co of South Australia Ltd v Warbey [1971] SASR 255 ; Re Burns (decd) [1969] WAR 97 ; Re Alleyn (decd) [1965] SASR 22 ; Re Fleming (decd); McNamara v Fleming [1963] VR 17 ; Re Wilton [1958] Qd R 559 , SC(QLD), Full Court; Re Thomson [1956] SASR 188 ; Re Guidi (decd) [1948] SASR 207 ; Re Minton; Public Curator v Toohey [1939] St R Qd 159 ; Re Livingston; Irving v Irving [1923] SASR 387 . The paragraph below is current to 20 September 2007 [395-940] Words with more than one ordinary meaning If a word or phrase in a will has more than one ordinary meaning, then the usual meaning rule1 does not apply and the court will instead apply the most likely meaning, taking into account the surrounding circumstances of the particular case, the intention of the testator as expressed in the whole of the will and the context of the will.2 Although the rules of construction have resulted in certain words acquiring a prima facie meaning at law,3 the modern approach is that the word in question will be construed as having a different meaning if the entire circumstances and the context of the will indicate that this should be so.4 For example, the word money may have several possible meanings depending upon the language of the will and the surrounding circumstances.5 Notes 1 As to the usual meaning rule see [395-925].2 Perrin v Morgan [1943] AC 399; [1943] 1 All ER 187 .3 See, for example, Brennan v Permanent Trustee Co of New South Wales Ltd (1945) 73 CLR 404 at 409; [1945] ALR 411; (1945) 19 ALJ 200 per Rich J (meaning of survivors); Elliott v Joicey [1935] AC 209 at 218; [1935] All ER Rep 578 per Lord Russell; Matthews v Williams (1941) 65 CLR 639; [1943] ALR 113 (meaning of issue); Re Brooke (decd); Edyvean v Archer [1903] AC 379; (1903) 89 LT 4 , PC.4 Perrin v Morgan [1943] AC 399 at 418-20 per Lord Russell, at 420 per Lord Romer; [1943] 1 All ER 187 ; Re Purnchards Will Trusts [1948] Ch 312 ; Re Everett; Prince v Hunt [1944] Ch 176; [1944] 2 All ER 19 (words stocks and shares included all the investments the testator wished to dispose of, as identified by the surrounding circumstances and context of the will).5 Re Leury (decd) [1975] VR 601 ; Lewis v OLoughlin (1971) 125 CLR 320; [1972] ALR 456; (1971) 45 ALJR 640 ; Ramsay v Lowther (1912) 16 CLR 1 ; Re Lowin (decd); Perpetual Trustee Co Ltd v Robins [1967] 2 NSWR 140;

(1967) 85 WN (Pt 1) (NSW) 403 , CA(NSW); Minehan v Minehan [1965] WAR 196 ; Re Nankivell [1965] SASR 269 ; Re East (decd) [1964] QWN 16 ; Re McLennan [1963] VR 270 ; Re Ross [1963] SASR 32 ; Re Litchfield (decd); Public Trustee v Millett [1961] ALR 750; (1961) 2 FLR 454 , SC(NT); In the Estate of Ward (decd) [1957] SASR 125 ; Re OShea (decd); National Trustees Executors & Agency Co of Australasia Ltd v OShea [1953] VLR 43 ; Re Jordan (decd); Tasmanian Permanent Executors and Trustees Assn Ltd v Symmons [1948] Tas SR 59 ; Re Stokell (1913) 9 Tas LR 7 ; Re Pearce (decd) [1946] SASR 118 ; Public Trustee v Smith (1944) 44 SR (NSW) 348; 61 WN (NSW) 206 ; Perpetual Trustee Co Ltd v Connell (1940) 57 WN (NSW) 81 ; Re Albert; Albert v Albert [1940] VLR 353; [1940] ALR 316 . The paragraph below is current to 20 September 2007 [395-945] Technical words and phrases If words or phrases used in a will have, prima facie, a technical, legal or scientific meaning, there is a strong presumption1 that the words or phrases bear that meaning.2 Where a word has a particular legal meaning, the presumption will still apply even if the testamentary instrument was drafted by a lay person and not a lawyer.3 Notes 1 Re Harcourt; Portman v Portman [1921] 2 Ch 491 at 503 per Lord Sterndale MR, CA (affirmed Portman v Portman [1922] 2 AC 473; (1922) 128 LT 129 ). The dictionary or armchair principle may be used to rebut the presumption, but strong evidence will be required: Re Harcourt; Portman v Portman [1921] 2 Ch 491 at 503 per Lord Sterndale MR.2 Re Cook; Beck v Grant [1948] Ch 212; [1948] 1 All ER 231 ; Re Van Lessen [1955] 3 All ER 691; [1955] 1 WLR 1326; Re Rayner; Rayner v Rayner [1904] 1 Ch 176; (1903) 89 LT 681 , CA (trade and business usage and terminology).3 Allen v Crane (1953) 89 CLR 152; [1953] ALR 959 ; Re Cook; Beck v Grant [1948] Ch 212; [1948] 1 All ER 231 . Note that evidence as to the meaning of legal technical terms is not admissible: Leach v Jay (1878) 9 Ch D 42 , CA. The paragraph below is current to 20 September 2007 [395-950] Custom If a testator belonged to a religious, trade or other special group of people, and he or she used words in a will which have a special meaning for that group of people, the court will usually give effect to that special meaning when interpreting the will.1 This principle may be applied even where the words of the will are clear and unambiguous according to their usual meaning.2 It may also be applied to a description of a place, property or residence if the special meaning or custom has significance there.3 The court will admit extrinsic evidence to determine the customary meaning as it is a question of fact.4 Notes 1 Re Gillson (decd); Ellis v Leader [1949] 1 Ch 99; [1948] 2 All ER 990, CA (referring to bloodstock); Re Rayner; Rayner v Rayner [1904] 1 Ch 176 at 188; (1903) 89 LT 681 per Vaughan Williams LJ, CA (referring to securities); Shore v Wilson (1842) 9 Cl & Fin 355; 8 ER 450 (referring to godly persons).2 Shore v Wilson (1842) 9 Cl & Fin 355; 8 ER 450; Max Cooper & Sons Pty Ltd v Sydney City Council (1980) 29 ALR 77; 54 ALJR 234 . As to the usual meaning rule see [395-925].3 Anstee v Nelms (1856) 1 H & N 225; 156 ER 1186.4 Shore v Wilson (1842) 9 Cl & Fin 355; 8 ER 450. As to extrinsic evidence generally see [395-995]-[3951005]. The paragraph below is current to 20 September 2007 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations

[395-955] Omission, change and transposition of words: rectification Where the court has clearly determined the testators main purpose and intention, but the intention would be defeated by, or is inconsistent with, an apparently defective or meaningless provision in the will, the courts of probate and of construction have varying powers to alleviate the defect.1 Where the will is ambiguous, the courts main aim is to construe the will in a manner that prevents whole or partial intestacy.2 The court of probate may delete words inserted in the will of which the testator did not know and approve or that were inserted by fraud, but except in jurisdictions with statutory rectification powers,3 it cannot add omitted words.4 In all jurisdictions except Western Australia, the probate court may alter the will if it is satisfied that the will is expressed in such a way as to fail to carry out the testators intentions; it may then rectify the will so as to carry out those intentions.5 The court must be satisfied that the testators intention can be discerned to the point that an order can be made carrying it out.6 In Queensland, under common law, the probate court has the same power to add words to the will as it previously had to omit material where there was an accidental or inadvertent insertion.7 The Supreme Court of Western Australia will assume powers of rectification similar to all other jurisdictions upon commencement of the (WA) Wills Amendment Bill 2006.8 The court of construction cannot delete words but, where necessary, may transpose or ignore words.9 Furthermore, the court may read in words where necessary in order to give effect to the testators clear intention,10 but only where it is clearly apparent that an omission has been made and the court can identify what has been omitted with reasonable certainty.11 Notes 1 As to the respective roles of the courts of probate and construction see [395-910] and [3952415], [395-2420].2 Re Kallil (decd); Koorey v Kallil [1957] NZLR 10 , CA(NZ); In the Will of Barnett; Bradbury v Barnett [1919] VLR 524; (1919) 25 ALR 289 , SC(VIC), Full Court; Fell v Fell (1922) 31 CLR 268; 29 ALR 31 . See further [395-960]. As to intestacy generally see [3951500]-[395-2095].3 (ACT) Wills Act 1968 s 12A (NT) Wills Act 2000 s 27 (NSW) Wills, Probate and Administration Act 1898 s 29A; (NSW) Succession Act 2006 (opn on proc) s 15(4) (QLD) Succession Act 1981 s 33 (SA) Wills Act 1936 s 25AA (TAS) Wills Act 1992 s 47 (VIC) Wills Act 1997 s 31. In Western Australia (WA) Wills Amendment Bill 2006 cl 24 when enacted, inserts (WA) Wills Act 1970 ss 49, 50. See further [395-2400]-[395-3475]. 4 Osborne v Smith (1960) 105 CLR 153; [1961] ALR 831; (1960) 34 ALJR 368 ; Tatham v Huxtable (1950) 81 CLR 639 at 645; [1951] ALR 1; (1950) 24 ALJ 416 per Latham CJ; In the Will of Cartledge (decd) [1919] VLR 182; (1919) 25 ALR 94; 40 ALT 177 ; In the Will of Green; Crowson v Wild [1907] VLR 284; (1907) 13 ALR 121; 28 ALT 206 at 288 per ABecket J. As to the court of probate see [395-910].5 (ACT) Wills Act 1968 s 12A

(NT) Wills Act 2000 s 27 (NSW) Wills, Probate and Administration Act 1898 s 29A; (NSW) Succession Act 2006 (opn on proc) s 27 (QLD) Succession Act 1981 s 33 (SA) Wills Act 1936 s 25AA (TAS) Wills Act 1992 s 47 (court must be satisfied beyond reasonable doubt). (VIC) Wills Act 1997 s 31. In Western Australia (WA) Wills Amendment Bill 2006 cl 24 when enacted, inserts (WA) Wills Act 1970 s 50. 6 Estate of Spinks (unreported, CA(NSW), Sheller, Mahoney and Meagher JJA, No 40544/90, 12 December 1991).7 Re Hess [1992] 1 Qd R 176 ; Re Allen [1988] 1 Qd R 1 .8 (WA) Wills Amendment Bill 2006 cl 24 inserting (WA) Wills Act 1970 Pts XI, XII.9 Re Lourie (decd) [1968] NZLR 541 ; Re Thomas (decd); Trustees Executors and Agency Co Ltd v Thomas [1925] VLR 488 at 493 per McArthur J; In the Will of Barnett; Bradbury v Barnett [1919] VLR 524; (1919) 25 ALR 289 , SC(VIC), Full Court; Re Smith [1948] 1 Ch 49 at 53 per Vaisey J; Towns v Wentworth (1858) 11 Moo PCC 526 at 543; 14 ER 794 at 800 .10 Re Smith [1948] 1 Ch 49.11 McClymont v Hooper (1973) 128 CLR 147; [1972-73] ALR 1331; (1973) 47 ALJR 222 ; Betts v Conolly (1970) 120 CLR 417; [1970] ALR 852; (1970) 44 ALJR 197 ; Andrews v National Trustees, Executors and Agency Co of Australasia Ltd (1936) 56 CLR 1; [1937] VLR 14; [1937] ALR 1; BC3700073 ; Fell v Fell (1922) 31 CLR 268; 29 ALR 31 ; In the Estate of French (decd) [1961] SASR 302 . The court will not read in words by conjecture but must have a strong persuasion as to which words were omitted; a mere strong suspicion is not sufficient when reading the whole will in a single context: Re Houlgrave (decd); Public Trustee v Doodie and Houlgrave (1980) 23 SASR 107; Butlin v Butlin (1966) 113 CLR 353; [1967] ALR 352; (1966) 39 ALJR 438 ; Re Rileys Will Trusts [1962] 1 All ER 513; [1962] 1 WLR 344 ; Re Bacharachs Will Trusts; Minden v Bacharach [1959] 1 Ch 245; [1958] 3 All ER 618; [1959] 2 WLR 1 ; Re Whitrick [1957] 2 All ER 467; [1957] 1 WLR 884 , CA; Re Cory (decd); Cory v More [1955] 2 All ER 630; [1955] 1 WLR 725; Re Follett (decd); Barclays Bank Ltd v Dovell [1955] 2 All ER 22; [1955] 1 WLR 429 , CA. The paragraph below is current to 20 September 2007 [395-960] Presumption against intestacy The golden rule of construction is that the court of construction aims to interpret and give effect to a testamentary instrument so as to avoid an intestacy.1 Where the meaning of the will is unclear, the court presumes the testator did not intend to die intestate, unless a different conclusion can be drawn on a fair and reasonable construction of the will.2 In applying the presumption, the court may transpose, supply, change or ignore words.3 If the words of the will clearly indicate an intention on the part of the testator to die intestate, the court must give effect to that intention.4 Similarly, if the words of the will are ambiguous, and admissible extrinsic evidence5 does not resolve the ambiguity, the court cannot apply the presumption against intestacy so as to give the words of the will an unsubstantiated meaning.6 Notes 1 Re Edwards (decd); Turner v Roberts [1981] VR 794 at 795 per Kaye J; Jenkins v Stewart (1906) 3 CLR 799 at 804; 12 ALR 370 ; Re Beames (decd); Pearce v Beames (1979) 22 SASR 595 at 599 per Matheson J; Re Steel (decd); Public Trustee v Christian Aid Society [1979] Ch 218; [1978] 2 All ER 1026; [1978] 2 WLR 950 at 956 ; Re Cox (decd) [1967] Qd R

173 ; Re East (decd) [1964] QWN 16 ; Re Murray (decd); Equity Trustees Executors and Agency Co Ltd v Murray [1958] VR 4; [1958] ALR 605 ; Re Maley [1944] SASR 99 at 101 per Richards J; Re Price [1941] St R Qd 192 , SC(QLD), Full Court; Re Barber; James v Barber (1937) 37 SR (NSW) 470 ; Re Hall (decd); Bentick v Hall [1918] VLR 448; (1918) 24 ALR 229 ; Re Dwyer; National Trustees, Executors & Agency Co v Dwyer (1900) 26 VLR 263 at 266; 6 ALR 65 per Madden CJ. As to intestacy see [395-1500]-[396-2095]. As to the respective roles of the courts of probate and construction see [395-910]. See also Kay v South Eastern Sydney Area Health Service [2003] NSWSC 292; BC200301648 ; Motum v Motum [1999] NSWSC 761; BC9904187 .2 Fell v Fell (1922) 31 CLR 268 at 275-6; 29 ALR 31 per Isaacs J; Re East (decd) [1964] QWN 16 ; Byrne v Dunne (1910) 11 CLR 637; [1912] AC 407; (1910) 17 ALR 457 ; Re Edwards (decd); Turner v Roberts [1981] VR 794 ; Public Trustee v Executor Trustee and Agency Co of South Australia Ltd (1984) 36 SASR 32 at 39 per Wells J.3 Re Houlgrave (decd); Public Trustee v Doodie and Houlgrave (1980) 23 SASR 107 at 112 per Matheson J (golden rule accepted, but did not operate to supply words in this case); Re Leury (decd) [1975] VR 601 ; In the Estate of Rigg [1960] SASR 197 at 198 per Napier CJ; Re Browne; Public Trustee v Browne (1939) 39 SR (NSW) 283 ; Re Thomas (decd); Trustees Executors and Agency Co Ltd v Thomas [1925] VLR 488 ; Fell v Fell (1922) 31 CLR 268; 29 ALR 31 ; In the Will of Barnett; Bradbury v Barnett [1919] VLR 524 at 533; (1919) 25 ALR 289 per Cussen J, SC(VIC), Full Court; Re Shackelford (decd); Boothby v Shackelford [1918] VLR 279 . As to the power of the court to transpose, change or ignore words see further [395-955].4 Re Rowland (decd); Smith v Russell [1963] 1 Ch 1; Re Wragg (decd); Hollingsworth v Wragg [1959] 2 All ER 717; [1959] 1 WLR 922 at 930 ; Re Scott [1957] St R Qd 507 at 510 ; Re Bailey; Barrett v Hyder [1951] Ch 407; [1951] 1 All ER 391 ; Re Sharp [1946] Tas SR 13 ; Re Smith [1938] VLR 59 ; Lenehan v Lenehan (1892) 13 LR (NSW) Eq 59.5 As to the admissibility of extrinsic evidence see [395-995]-[395-1005].6 Re Campbell (decd) [1950] SASR 228 at 233 per Mayo J; Re Gibson; Doig v Haynes [1929] SASR 321 ; Byrne v Dunne (1910) 11 CLR 637 at 643; [1912] AC 407; (1910) 17 ALR 457 per Griffith CJ (affirmed Dunne v Byrne (1912) 16 CLR 500; [1912] AC 407; (1912) 18 ALR 122 ). The paragraph below is current to 20 September 2007 [395-965] Preservation of dispositions The court of construction will construe testamentary instruments in a manner which preserves rather than destroys the gifts and dispositions contained in them.1 This principle2 is an extension of the presumption that the testator intended his or her will to be effective.3 Where a liberal construction of a will would be effective and meaningful, and a strict literal construction would destroy a gift or disposition, the court will apply the principle so as to favour the liberal construction of the will.4 Notes 1 Langston v Langston (1834) 2 Cl & Fin 194 at 243; [1824-34] All ER Rep 598; (1834) 6 ER 1128 at 1147 . As to the respective roles of the courts of probate and construction see [395945].2 Known by the Latin term ut res magis valeat quam pereat, meaning it is better for a thing to have effect than to be made void: Roe d Wilkinson v Tranmarr (1757) Willes 682; [1558-1774] All ER Rep 461; (1757) 125 ER 1383.3 See [395-915], [395-960].4 Langston v Langston (1834) 2 Cl & Fin 194 at 243; [1824-34] All ER Rep 598; (1834) 6 ER 1128 at 1147 ; Roe d Wilkinson v Tranmarr (1757) Willes 682; [1558-1774] All ER Rep 461; (1757) 125 ER 1383. The paragraph below is current to 20 September 2007 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-970] Inaccurate descriptions of dispositions Where a will contains a partly true and a partly false description of a property or a person, if the court of construction can identify the

person or property with the aid of admissible extrinsic evidence1 via the true part of the description, then the false part of the description will not be allowed to invalidate the gift. This principle of construction is known as falsa demonstratio non nocet, cum de corpore constat.2 The court cannot delete inaccurate words in a will3 but in certain circumstances it may incorporate words or ignore or reject the false part of a description and give effect to the true part in order to make a gift or disposition effective.4 It is of no consequence that the false portion of the description is at the beginning or end of a clause in the will.5 The court will not apply the principle if it cannot determine the most important part of the clause.6 It is important to distinguish between words which are inaccurate and words which are used to restrict a gift or disposition, the principle having no application in the latter situation.7 Where the whole description is inaccurate, and not just part of the description, the principle will only be applied where the surrounding circumstances and the whole context of the will clearly indicate the testators true intention without any element of doubt.8 In Queensland where a testator uses the term realty or personalty in a gift of residue, the strict interpretation will not be followed, so that if only one description is used all the property will pass as residue.9 Notes 1 Re Gifford (decd); Gifford v Seaman [1944] Ch 186 at 188; [1944] 1 All ER 268; (1944) 170 LT 267 per Simonds J; Re Edwards (decd); Turner v Roberts [1981] VR 794 at 797 per Kaye J; Re Osoba (decd); Osoba v Osoba [1979] 2 All ER 393; [1979] 1 WLR 247 at 254, CA; Re Price [1932] 2 Ch 54 ; Re Brocket; Dawes v Miller [1908] 1 Ch 185; (1907) 97 LT 780 ; Cowen v Truefitt Ltd [1899] 2 Ch 309; (1899) 81 LT 104 . As to the respective roles of the courts of probate and construction see [395-945].2 Falsa demonstratio non nocet, cum de corpore constat means that an inaccurate description does not vitiate a document or part thereof: see deeds and other instruments [140-630].3 See further [395-910], [395-955].4 As to the application of the principle to gifts of property see Re McBean (decd) (1973) 7 SASR 579 ; Re Hillier (decd) (1971) 1 SASR 140 at 145 per Walters J; Re Charleson (decd) [1968] VR 252 at 255 per Starke J; Re Hackett (decd) [1966] VR 232 at 237-8 per Winneke CJ; Re Gard (decd) [1965] SASR 244 ; In the Will of Rawes (decd); Crossthwaite v Collin [1917] VLR 323; (1917) 38 ALT 191 ; Re Anderson (1916) 12 Tas LR 71 ; Re Davis; Tuxfor v Davis (1906) 7 SR (NSW) 71; 23 WN (NSW) 237 ; In the Will of Sargood; Trustees, Executors & Co v Sargood (1904) 10 ALR 149; 26 ALT 51 ; Brown v Brown (1901) 1 SR (NSW) 218; 18 WN (NSW) 300 ; Gallagher v Adams (1887) 13 VLR 948; 9 ALT 148 . As to the application of the principle to gifts to persons see Re Gray (decd); Menary v Short [1919] St R Qd 295; [1919] QWN 50 ; Re OMara; OMara v OMara (1909) 10 SR (NSW) 67; 26 WN (NSW) 185 ; Re Garnock; Garnock v Garnock (1909) 10 SR (NSW) 51; 27 WN (NSW) 13 ; Re McNicol; Herron v McNicol [1909] VLR 311; (1909) 15 ALR 308; 30 ALT 220 ; In the Will of Loughlin; Acheson v OMeara [1906] VLR 597; (1906) 12 ALR 411; 28 ALT 28 ; Easton v Jeffray (1887) 13 VLR 900; 9 ALT 109 ; Gale v Mathew (1873) 7 SALR 97 .5 Hardwick v Hardwick (1873) LR 16 Eq 168 at 175; 21 WR 719 per Lord Selborne LC; Cowen v Truefitt Ltd [1899] 2 Ch 309 at 311-12; (1899) 81 LT 104 per Lindley MR.6 For example, where there are two or more claimants and the court is unable to decide who the testator intended to benefit: Re Constable (decd) [1971] VR 742 .7 Wrightson v Calvert (1860) 1 John & H 250; 70 ER 740 (testator had three grandchildren; reference to only two grandchildren not an error but clearly meant to exclude the third grandchild). See also Peoples v Simpson [2005] NSWSC 355; BC200502351 (children and grandchildren); Napper v Miller (2003) 11 BPR 21,175; [2003] NSWSC 376; BC200302126 (surviving grandchildren); Napper v Miller [2002] NSWSC 1122; BC200207054 (unborn children); Marks v Pope [2001] NSWSC 105; BC200100643 (daughters); Estate of Warren [2001] NSWSC 104; BC200100609 (step-children); Public Trustee (Qld) v Jacob [2006] QSC 372; BC200610323 (children and grandchildren); Hill v Handford [2001] QCA 319; BC200104674 (description of

children); In the matter of Cuckow [1999] QSC 175; BC9904207 (grandchildren); Burman v Burman [1998] QCA 250; BC9804376 (surviving sons); Hopwood v Cuthbertson (2001) 10 Tas R 186; [2001] TASSC 64; BC200103007 (child); Cuthbertson v Hopwood [2000] TASSC 92; BC200003952 . 8 Re Lewiss Will Trusts; Lewis v Williams [1984] 3 All ER 930; [1985] 1 WLR 102 ; Re Gifford (decd); Gifford v Seaman [1944] Ch 186 at 189; [1944] 1 All ER 268; (1944) 170 LT 267 per Simonds J; Cowen v Truefitt Ltd [1899] 2 Ch 309 at 311; (1899) 81 LT 104 .9 (QLD) Succession Act 1981 s 29. See also Fotiadis v Jinks [2002] NSWSC 420; BC200202391 . The paragraph below is current to 20 September 2007 [395-975] Ejusdem generis rule The ejusdem generis1 rule provides that where a testator enumerates a set of things or individuals which together form a specific class2 and then follows the enumeration with a general word or phrase, the ambit of the general word or phrase will be limited by the previous words of narrower import.3 The principle of ejusdem generis is a special qualification of the usual meaning rule,4 as the general words are given a narrower secondary meaning and not their primary meaning.5 The court of construction will not apply the rule where to do so would clearly be contrary to the testators intention6 or would lead to partial intestacy.7 The enumeration of specified items which is preceded by a gift in general terms will not be subject to the operation of the ejusdem generis rule.8 Notes 1 Ejusdem generis means of the same kind or nature. See Gregory v Fearn [1953] 2 All ER 559; [1953] 1 WLR 974 , CA.2 The rule will only be applied where the enumerated persons or things form an identifiable class: Tillmanns & Co v SS Knutsford Ltd [1908] 2 KB 385 at 402-3; [190810] All ER Rep 549; (1908) 99 LT 399 per Farwell LJ, CA.3 Lyndon v Standbridge (1857) 2 H & N 45 at 51; 157 ER 19 at 22 (general rule of construction that, where a particular class is spoken of, and general words follow, the class first mentioned is to be taken as the most comprehensive, and the general words treated as referring to matters ejusdem generis with that class).4 See [395-925].5 Re Alleyn (decd) [1965] SASR 22 at 24-6 per Hogarth J; Re Fitzpatrick (1934) 78 Sol Jo 735; Re Layard; Layard v Bessborough (1916) 85 LJ Ch 505; 115 LT 15 (affirmed Re Layard; Layard v Bessborough (1917) 33 TLR 261, HL); Re Castlehow; Lamonby v Carter [1903] 1 Ch 352; (1902) 88 LT 455 .6 Benham v Benham (1910) 30 NZLR 30 at 32; 13 GLR 69 ; Tillmanns & Co v SS Knutsford Ltd [1908] 2 KB 385 at 402-3; [1908-10] All ER Rep 549; (1908) 99 LT 399 per Farwell LJ, CA; Moodie v Commins (1903) 22 NZLR 510; 5 GLR 198 ; Re Stockport Ragged, Industrial, and Reformatory Schools [1898] 2 Ch 687 at 696 ; Anderson v Anderson [1895] 1 QB 749 at 753; (1895) 72 LT 313 , CA. As to the respective roles of the courts of probate and construction see [395-945].7 Re Rowling (decd); Ellis v Rowling [1942] NZLR 88 ; Re Hall (decd); Bentick v Hall [1918] VLR 448; (1918) 24 ALR 229 . Thus, residuary clauses such as a general residuary bequest will be unlikely to be construed according to the ejusdem generis rule: Benham v Benham (1910) 30 NZLR 30 at 32; 13 GLR 69 ; Tillmanns & Co v SS Knutsford Ltd [1908] 2 KB 385 at 402-3; [1908-10] All ER Rep 549; (1908) 99 LT 399 per Farwell LJ, CA. As to the presumption that the testator did not intend to die intestate see [395-960].8 Bridges v Bridges (1729) Eq Cas Abr 330; 22 ER 281; Re Duffell; Equity Trustees Executors and Agency Co Ltd v Duffell [1926] VLR 489; (1926) 48 ALT 105 ; Re Fleetwood; Sidgreaves v Brewer (1880) 15 Ch D 594; 49 LJ Ch 514 ; Re Kendalls Trust (1851) 14 Beav 608; 51 ER 418. The paragraph below is current to 20 September 2007 [395-980] Ambiguous words will not restrict an earlier clear gift Where one clause establishes a clear gift, and a later clause appears inconsistent with the gift but is ambiguous or unclear, the later ambiguous clause will not restrict or destroy the original clear gift.1 The court of construction will attempt to determine the testators intention, specifically, whether he

or she intended to qualify an earlier gift made in the will, as shown by the will and codicils read as a whole2 and to give effect to that intention.3 Where the intention to revoke or qualify a gift is clear, and there is an inconsistency between the will and a codicil, the court may construe the codicil either as qualifying the will in some way or as partly (rather than wholly) revoking the gift in the will.4 Notes 1 Perpetual Trustee Co Ltd v Wright; Re Will of Cox (Jnr) (decd) (1987) 9 NSWLR 18 ; Smidmore v Smidmore (1905) 3 CLR 344; 12 ALR 203; [1905] HCA 58; BC0500020 ; Re Kipping; Shearer v Hill [1948] St R Qd 247 , SC(QLD), Full Court; Re Brown; Cavanagh v Cronin [1940] St R Qd 154 , SC(QLD), Full Court; Re Freeman; Hope v Freeman [1910] 1 Ch 681 at 691; (1910) 102 LT 516 per Buckley LJ, CA; Peter v Shipway (1908) 7 CLR 232 at 243; 15 ALR 214 per Griffith CJ; Re Jones; Richards v Jones [1898] 1 Ch 438 at 441; (1898) 78 LT 74 per Byrne J.2 Doe d Hearle v Hicks (1832) 8 Bing 475; 131 ER 476 . As to the respective roles of the courts of probate and construction see [395-945].3 Re Syme (decd) [1980] VR 109 at 113 per Lush J.4 Re Sewell [1929] SASR 226 ; Re McGeorge [1921] SASR 1 ; Re Freeman; Hope v Freeman [1910] 1 Ch 681; (1910) 102 LT 516 , CA; Re Day; Kavanagh v Day (1907) 7 SR (NSW) 484; 24 WN (NSW) 117 ; National Trustees, Executors & Agency Co of Australia v McGuigan (1900) 28 VLR 273; 7 ALR 36 ; In the Will of Jackson; Jackson v Jackson (1868) 7 SCR (NSW) Eq 28; Kellett v Kellett (1868) LR 3 HL 160 at 167 per Lord Cairns. Where the testator provides a life interest to his or her spouse, with a remainder to the children, the earlier gift to the spouse is qualified by the later interest in remainder to the children: Public Trustee v Roberts [1966] SASR 269 ; Re Inkster [1939] SASR 121 ; Re Warren [1936] SASR 457 ; Re Pryor; Woods v Pryor [1923] SASR 199 ; Re Carless; Carless v Carless (1911) 11 SR (NSW) 388; 28 WN (NSW) 112 ; Re Ridgway; Sutherland v Ridgway (1900) 26 VLR 254; 6 ALR 93 ; Brown v Brown (1886) 20 SALR 98 . Another construction to which the court may give effect is a gift of a life interest to the spouse with a general power of appointment over the whole property the subject of the gift, allowing the spouse to appoint to himself or herself, coupled with a gift to the children if no appointment is executed: Re Rollings (1974) 9 SASR 418 ; In the Estate of Ward (decd) [1957] SASR 125 ; Re McIntosh [1929] SASR 21 ; Re Ryder [1914] 1 Ch 865 ; Re Sanford; Sanford v Sanford [1901] 1 Ch 939 . As to intention to revoke see [395615]. The paragraph below is current to 20 September 2007 [395-985] Rule of despair The rule of despair states that if there are two clauses in a testamentary instrument which conflict, the later clause will prevail over the earlier one.1 However, the rule may be displaced and the former clause given effect where:2 (1) the earlier clause is clear and the later conflicting clause is ambiguous, the rule that ambiguous words will not restrict a clear gift will apply;3 and (2) after reading the will as a whole, and ascertaining the intention of the testator, it appears that the intention was more accurately expressed by the earlier clause rather than by the later one.4 The rule will not be applied where its application would result in an intestacy.5 Inconsistencies between a clause in a will and a clause in a later codicil may result in the codicil partially revoking the will if there is a clear expression of intention to do so in the words of the codicil.6

Notes 1 Re Potters Will Trusts [1944] Ch 70 at 77 ; Re Hammond; Hammond v Treharne [1938] 3 All ER 308 ; Doggett v Lenehan [1926] St R Qd 84 at 88 per Macnaughton J; Gallagher v Adams (1887) 13 VLR 948 at 955; 9 ALT 148 per Webb J; Re Bywater; Bywater v Clarke (1881) 18 Ch D 17 at 24 ; Doe d Leicester v Biggs (1809) 2 Taunt 109; [1803-13] All ER Rep 546; (1809) 127 ER 1017 .2 Re Dubois [1940] SASR 1 at 3 per Murray CJ; Re Hamersley; Hamersley v Hamersley (1933) 35 WALR 85 ; Doggett v Lenehan [1926] St R Qd 84 at 88 per Macnaughton J; Cordeaux v Corbidge (1915) 32 WN (NSW) 15; Piper v Piper (1886) NZLR 5 SC 135 at 145.3 See [395-980]. See also Peter v Shipway (1908) 7 CLR 232 at 243; 15 ALR 214 per Griffith CJ; Re Kipping; Shearer v Hill [1948] St R Qd 247 , SC(QLD), Full Court; Re Brown; Cavanagh v Cronin [1940] St R Qd 154 , SC(QLD), Full Court.4 Re Dubois [1940] SASR 1 at 3 per Murray CJ; Re Hamersley; Hamersley v Hamersley (1933) 35 WALR 85 ; Doggett v Lenehan [1926] St R Qd 84 at 88 per Macnaughton J; Cordeaux v Corbidge (1915) 32 WN (NSW) 15.5 Piper v Piper (1886) NZLR 5 SC 135 at 138 per Johnston J. As to the presumption against intestacy see further [395-960] and [395-1500]-[396-2095].6 Re McGeorge [1921] SASR 1 at 4 per Gordon J. As to revocation generally see [395-595]-[395-645]. The paragraph below is current to 20 September 2007 [395-990] Uncertainty A disposition may fail on the grounds of uncertainty where the court of construction is unable to discern the testators intention1 from the words of the will. 2 A gift will be void for uncertainty if the beneficiary3 or the content of the disposition4 remains unidentifiable, despite an examination of extrinsic evidence admitted under the armchair rule or to clarify an equivocation.5 Where there is even a slight reason to prefer one ambiguous construction over another, the court will do so, even on the basis that it is closer to intestacy than the testators intention.6 Notes 1 See [395-915]. As to the respective roles of the courts of probate and construction see [395945].2 See [395-920]. See also Tatham v Huxtable (1950) 81 CLR 639; [1951] ALR 1; (1950) 24 ALJ 416 ; Perpetual Trustee Co Ltd v Gilmour [1979] 2 NSWLR 716 at 719 per Holland J. See, for example, Lutheran Church of Australia South Australia District Inc v Farmers Co-op Executors and Trustees Ltd (1970) 121 CLR 628; [1970] ALR 545; (1970) 44 ALJR 176 . See also Hammond v Hammond [2007] NSWSC 106; BC200700733 ; Hyde v Holland [2003] NSWSC 733; BC200304479 ; Rennes v Death [2003] NSWSC 708; BC200304441 ; Kay v South Eastern Sydney Area Health Service [2003] NSWSC 292; BC200301648 ; National Trust of Australia (NSW) v Amour (unreported, (CA)NSW, Meagher, Sheller and Cole JJA, 3 December 1997, BC9706373); Ellaway v Lawson [2006] QSC 170; BC200605353 ; Prosper v Wojtowicz [2005] QSC 177; BC200504808 ; Tower Trust Ltd v Worden [2004] SASC 159; BC200403304 ; Armstrong v Stokell [2001] TASSC 132; BC200107221 ; Bakranich v Robertson [2005] WASC 12; BC200500495 ; Perpetual Trustees (WA) Ltd v Riverwest Pty Ltd [2004] WASC 81; BC200402496 ; Re Kuzma; ex parte Public Trustee [2002] WASC 303; BC200207695 .3 In the Estate of Banks [1966] SASR 290 ; Re Berry (decd); Public Trustee v Berry [1968] SASR 286 ; Re McMahon [1913] St R Qd 47 . As to the identification of the beneficiary see [3951070].4 Asten v Asten [1894] 3 Ch 260 ; Re Sutherland [1909] VLR 223 ; Re Gibson; Doig v Haynes [1929] SASR 321 .5 Extrinsic evidence may be admissible under the statutory provisions in the Australian Capital Territory, the Northern Territory, Tasmania and Victoria: see [395-1005]. As to the armchair rule see [395-935]. As to equivocation see [395-1000].6 Gerhardy v British & Foreign Bible Society Inc (SA) (1982) 30 SASR 12 at 26 per Legoe J. See, for example, Re Ansell; Wardlaw v Eleblade [1947] Tas SR 36 . As to the presumption against intestacy see [395-960].

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(D) Types of gifts The paragraph below is current to 20 September 2007 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-1080] Classification A gift may be classified according to the subject matter or content of the gift: a devise is a gift of real property1 and a bequest or legacy 2 is a gift of personal property.3 A gift may also be classified according to the manner of disposition, distribution or ascertainment of the gift, that is, as a general,4 specific,5 demonstrative,6 residuary7 or class8 gift. Classification of the gift in this way is a matter of construction.9 A gift may further be classified by the type or quantity of interest conferred by the gift to the beneficiary;10 that is, as an absolute gift,11 limited interest,12 conditional gift13 or concurrent gift.14 Finally, a gift may be classified by the time at which the beneficiary is entitled to it; that is, as vested or contingent gifts.15 Notes 1 For the meaning of devise see: (ACT) Wills Act 1968 s 26(1)

(NT) Wills Act 2000 s 36 (uses the term disposition not devise) (NSW) Wills, Probate and Administration Act 1898 s 23(1); (NSW) Succession Act 2006 (opn on proc) ss 36-39 (speaking of dispositions and devise interchangeably) (QLD) Succession Act 1981 ss 33F-33R (SA) Wills Act 1936 s 29 (TAS) Wills Act 1992 s 35 (VIC) Wills Act 1997 s 40 (WA) Wills Act 1970 s 26(c). In Western Australia (WA) Wills Amendment Bill 2006 cl 20 when enacted, inserts (WA) Wills Act 1970 s 27 regarding dispositions. As to what constitutes real property see real property [355-5]-[355-25]. 2 The term pecuniary legacy is merely a descriptive term, indicating that the gift is a sum of money. The legal ramifications of the gift depend rather on its characterisation as a demonstrative (see [395-1095]), general (see [395-1085]) or specific gift: see [395-1090]. The circumstances under which gifts fail and the consequences of such failure vary according to the classification of the gift: see further [395-1150]-[395-1230].3 As to personal property generally see real property.4 See [395-1085].5 See [395-1090].6 See [395-1095].7 See [395-1100].8 See [395-1105].9 As to construction generally see [395-905]-[395-1005].10 Where the words conferring an interest on the beneficiary are ambiguous, the courts use certain principles of construction to resolve the ambiguity: see [395-905]-[395-990]. In the absence of all other means of ascertaining the testators intention, the court applies the construction of a gift which is most favourable to the donee: Cooper v Woolfitt (1857) 2 H & N 122 at 125; 157 ER 51 per Pollock CB.11 See [395-1115].12 See [395-1120].13 See [395-1130]-[395-1145].14 See [3951110].15 See [395-1125]. The paragraph below is current to 20 September 2007 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-1085] General gifts A general gift is a gift of property, the funds for which are provided from the general estate.1 General gifts are often monetary or pecuniary legacies, or may refer to particular types of property, such as shares.2 It is immaterial whether the testator actually owned the property at the time of his or her death;3 if not, the executors of the will must purchase the subject matter of the gift for the stated beneficiary, or pay the beneficiary the corresponding value of the gift.4 A general legacy of a particular type of property does not fail where: (1) the property still exists even if there is no market for the subject matter of the gift;5 or (2) the property has changed its nature slightly, but still substantially exists as described in the will.6

However, the legacy does fail where the property described no longer exists, since neither the gift nor any ascertainable equivalent value can be given to the beneficiary.7 Notes 1 Re Plowright (decd) [1971] VR 128 ; Re OConnor; Westminster Bank Ltd v OConnor [1948] Ch 628; [1948] 2 All ER 270 . For the meaning of general devise see: (ACT) Wills Act 1968 s 26(1), 26(2) (NT) Wills Act 2000 s 36 (uses the term disposition not devise) (NSW) Wills, Probate and Administration Act 1898 s 23; (NSW) Succession Act 2006 (opn on proc) ss 36-39 (speaking of dispositions and devise interchangeably) (QLD) Succession Act 1981 ss 33F-33R (SA) Wills Act 1936 ss 29, 30(1) (TAS) Wills Act 1992 s 36(1) (VIC) Wills Act 1997 s 40. When enacted (WA) Wills Amendment Bill 2006 cl 20 inserts (WA) Wills Act 1970 s 27 regarding dispositions. For the meaning of bequest see: (ACT) Wills Act 1968 s 26(3) (NT) Wills Act 2000 s 35 (NSW) Wills, Probate and Administration Act 1898 s 23(3); (NSW) Succession Act 2006 (opn on proc) (does not define bequest) (QLD) Succession Act 1981 ss 33F-33R (SA) Wills Act 1936 s 30(2) (TAS) Wills Act 1992 s 36(2) (VIC) Wills Act 1997 s 41. When enacted (WA) Wills Amendment Bill 2006 cl 20 inserts (WA) Wills Act 1970 s 27 regarding dispositions. The legislation in the Northern Territory, Queensland, Victoria and Western Australia does not specifically define bequest but uses the term disposition. 2 Gifts of shares are prima facie general, but a description of an exact amount of shares in a particular company may be a specific gift if the testator owns that exact amount of shares in the company at the date of the will: McBride v Hudson (1962) 107 CLR 604; [1963] ALR 226; (1962) 35 ALJR 439 .3 See Bothamley v Sherson (1875) LR 20 Eq 304; Re Plowright (decd) [1971] VR 128 .4 Re Plowright (decd) [1971] VR 128 ; Re OConnor; Westminster Bank Ltd v OConnor [1948] Ch 628; [1948] 2 All ER 270 .5 Re Plowright (decd) [1971] VR 128 ; Re OConnor; Westminster Bank Ltd v OConnor [1948] Ch 628; [1948] 2 All ER 270 ; Re Borne; Bailey v Bailey [1944] Ch 190; [1944] 1 All ER 382 (general legacy being a type of stock which

still existed, but sales of it now forbidden; valuation held to be still possible).6 Re Gage; Crozier v Gutheridge [1934] Ch 536; [1934] All ER Rep 610 .7 Re Plowright (decd) [1971] VR 128 ; Re Gray; Dresser v Gray (1887) 36 Ch D 205; 57 LT 132 . The paragraph below is current to 20 September 2007 [395-1090] Specific gifts A specific devise or legacy 1 is a gift of some portion of the testators estate which is clearly distinguishable from the general mass of the estate.2 A specific gift may dispose of property which at the time the will is executed is in the possession of the testator, or which may in the future come into the possession of the testator.3 It may be described generically, for example, as my shares, in which case the subject matter of the gift may decrease or increase between the date of the will and the death of the testator.4 If a specific gift no longer exists at the time of the testators death, the gift usually fails completely and the gift is adeemed.5 Notes 1 The distinction between real property and personal property for the purposes of the administration of assets in a will has been abolished and devises of real property are no longer automatically specific: Allen v Edmonds (1886) 12 VLR 789 ; Lancefield v Iggulden (1874) LR 10 Ch App 136; [1874-80] All ER Rep 910; Hensman v Fryer (1867) LR 3 Ch App 420; 17 LT 394.2 A specific gift is everything which a testator, identifying it by a sufficient description, and manifesting an intention that it should be enjoyed or taken in the state and condition indicated by that description, separates in favour of a particular legatee from the general mass of his or her estate: McBride v Hudson (1962) 107 CLR 604; [1963] ALR 226; (1962) 35 ALJR 439 .3 McBride v Hudson (1962) 107 CLR 604 at 617; [1963] ALR 226; (1962) 35 ALJR 439 per Dixon CJ.4 The beneficiary takes whatever is the content of the gift at the time of the testators death: see generally [395-1155]. See also Re Plowright (decd) [1971] VR 128 ; Re OConnor; Westminster Bank Ltd v OConnor [1948] Ch 628; [1948] 2 All ER 270 ; Re Borne; Bailey v Bailey [1944] Ch 190; [1944] 1 All ER 382 .5 See [395-1150]-[395-1165]. The paragraph below is current to 20 September 2007 [395-1095] Demonstrative gifts A demonstrative gift is a gift of a general nature, such as money, which is to be paid out of a specified part of the testators estate or a specified fund so that it behaves like a specific gift in relation to the designated fund, and like a general gift in that any shortfall in the fund is made up from the general estate.1 If the testator states in the will that the legacy is to be paid out of a specified fund or part of the estate and any shortfall cannot be made up out of the general estate, the legacy is specific and not demonstrative.2 It is a question of construction whether the gift is specific or demonstrative.3 Notes 1 Re Webster; Goss v Webster [1937] 1 All ER 602 at 603 per Lord Wright MR, at 605-6 per Romer LJ and Farwell J; (1936) 156 LT 128, CA.2 Re Webster; Goss v Webster [1937] 1 All ER 602; (1936) 156 LT 128, CA; Re Walton [1936] SASR 15 ; Paget v Huish (1863) 1 Hem & M 663 at 671; 8 LT 445; 71 ER 291 at 294 per Sir W Page Wood VC. Demonstrative legacies are not subject to ademption, but if the legacy is construed as specific then it is subject to ademption: see [395-1090].3 Re Pollock (decd) [1964] VR 554 ; Re Stephenss Will (1932) 27 Tas LR 58 ; Re Bedgood; Public Trustee v Public Trustee [1929] NZLR 194 ; Re Dymke (decd); Trustees Executors and Agency Co Ltd v Dymke [1918] VLR 649 at 655; (1918) 24 ALR 378; 40 ALT 90 per Hood J; Dawson v Reid (1915) 113 LT 52, HL; Mann v Copland (1817) 2 Madd 223; 56 ER 317. See also Connolloy v Connolloy [2003] NSWSC 928; BC200306040 . The paragraph below is current to 20 September 2007

To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-1100] Residuary gifts A residuary gift is a gift of the residuary estate; namely, that property which remains after all other gifts have been set aside or provided for.1 If other gifts fail under the will, the property enlarges the residuary estate.2 If a residuary gift fails or lapses, the property the subject of the gift will pass according to the rules of intestate succession.3 Notes 1 In the Estate of MacGregor (decd) (1975) 11 SASR 424 ; Easum v Appleford (1840) 5 My & Cr 56; 41 ER 292 at 295 per Lord Cottenham LC. See also Davis v Adventist Development and Relief Agency [2006] NSWSC 876; BC200607167 ; Public Trustee v Bennett [2004] NSWSC 955; BC200406969 ; Permanent Trustee Co Ltd v Northcott Society [1999] NSWSC 742; BC9904088 ; Public Trustee (Qld) v Jacob [2006] QSC 372; BC200610323 ; Lewis v Lohse [2003] QCA 199; BC200302360 ; Lewis v Lohse [2002] QSC 204; BC200204035 ; Re Will of Rodgers (decd); Reithmuller v Ballard [2001] 1 Qd R 543; [2001] QSC 282; BC200104445 ; Re Burman (decd) [1997] QSC 223; BC9706453; Parnell v Hinkley [2007] WASC 102; BC200703453 ; Mustard as Executrix of the Will of Thanas (decd) v Oikonomov (unreported, SC(WA), Owen J, 19 August 1998, BC9804054). As to the residuary estate see [395-4000]-[395-6035].2 See [395-4000]-[395-6035].3 For the meaning of residuary devise see: (ACT) Wills Act 1968 s 25 (NT) Wills Act 2000 s 30 (providing for failure of dispositions to fall into the residuary estate) (NSW) Wills, Probate and Administration Act 1898 s 22; (NSW) Succession Act 2006 (opn on proc) s 42 (QLD) Succession Act 1981 s 33G (providing for failure of dispositions to fall into the residuary estate) (SA) Wills Act 1936 s 28 (TAS) Wills Act 1992 s 34 (VIC) Wills Act 1997 s 35 (providing for failure of dispositions to fall into the residuary estate) (WA) Wills Act 1970 s 26(b). When enacted (WA) Wills Amendment Bill 2006 cl 19 amending (WA) Wills Act 1970 s 26 providing for failure of dispositions to fall into the residuary estate. As to intestate succession see [395-1500]-[395-2095]. The paragraph below is current to 20 September 2007 [395-1105] Class gift A class gift is a gift made to a group of individuals of uncertain number linked by a common tie as opposed to a set of specified individuals.1 Where the size of the class is capable of increase due to the addition of further members, the share of each member cannot be finally ascertained which will prevent the gift from being distributed2 and this possibility may also cause the gift to infringe the rule against perpetuities.3 In order to avoid these difficulties the actual members of the class entitled in the distribution of a class gift may be determined by the application of class closing rules.4 The class closing rules operate to ascertain exactly who is a member of the class at a given time and to artificially close the class at that time.5 The class may

be closed as soon as a member of the class becomes entitled to call for the distribution of his or her share.6 Unless a contrary intention is expressed in the will,7 once the class is closed, persons who subsequently meet the descriptive criteria of the class will not be included as members of the class.8 Notes 1 Kingsbury v Walter [1901] AC 187 at 192; (1901) 84 LT 697 per Lord Davey; Re Michell (decd) [1971] 2 SASR 312 at 320 per Bray CJ; Re Selby (decd); Cole v Cole [1952] VLR 273; [1952] ALR 491 . See also Denison v Denison [2000] NSWSC; BC200008416 (inclusion of adopted children in class gifts).2 See, for example, Crane v Crane (1949) 80 CLR 327 at 335-7 per Dixon J; Knight v Knight (1912) 14 CLR 86 at 112-3 per Isaacs J.3 As to the rule against perpetuities generally see perpetuities and accumulations. As to the vesting of class gifts see generally perpetuities and accumulations [310-40].4 Andrews v Partington (1791) 3 Bro CC 401; [1775-1802] All ER Rep 209; (1791) 29 ER 610 . The class closing rules are rules of convenience designed to facilitate early vesting: Re Bleckly (decd); Bleckly v Bleckly [1951] Ch 740 at 752; [1951] 1 All ER 1064; [1951] 1 TLR 902 per Jenkins LJ; Crane v Crane (1949) 80 CLR 327 at 335 per Dixon J.5 Andrews v Partington (1791) 3 Bro CC 401; [1775-1802] All ER Rep 209; (1791) 29 ER 610 .6 See, for example, Andrews v Partington (1791) 3 Bro CC 401; [1775-1802] All ER Rep 209; (1791) 29 ER 610 ; Knight v Knight (1912) 14 CLR 86 at 112-3 per Isaacs J; Crane v Crane (1949) 80 CLR 327 at 335-7 per Dixon J; Denison v Denison [2000] NSWSC; BC200008416 at [13].7 The class closing rules should be applied only where necessary as the result will generally contradict the testators intention: Knight v Knight (1912) 14 CLR 86 at 95 per Griffiths CJ, at 112-3 per Isaacs J. See also Viner v Francis (1789) 2 Cox, Eq Cas 191; 30 ER 88. If there is language in the will to show that the testator expressed an intention contrary to the class closing rules, then they will not apply: Re Edmondsons Will Trusts [1972] 1 All ER 444; [1972] 1 WLR 1652, CA.8 Crane v Crane (1949) 80 CLR 327 at 335 per Dixon J; Re Edmondsons Will Trusts [1972] 1 All ER 444; [1972] 1 WLR 1652. The class closing rules do not operate if there are no members of the class at the time of the testators death and the class remains open to those fitting the description, whenever they are born: Viner v Francis (1789) 2 Cox, Eq Cas 191; 30 ER 88. For example, a gift to all my grandchildren operates as an immediate class gift without qualification, and grandchildren born after the testators death take nothing as the class is determined at the time of death of the testator: Viner v Francis (1789) 2 Cox, Eq Cas 191; 30 ER 88. The testator may provide for an immediate class gift with a qualification, such as all my grandchildren who attain the age of 21, in which case the class closes when the first member of the class satisfies the qualification: Re Selby (decd); Cole v Cole [1952] VLR 273; [1952] ALR 491 ; Andrews v Partington (1791) 3 Bro CC 401; [17751802] All ER Rep 209; (1791) 29 ER 610 ; In the Estate of Parton (decd) [1966] SASR 390 . The paragraph below is current to 20 September 2007 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-1110] Concurrent gifts A concurrent gift is a gift to two or more persons. 1 Where property is given to several persons concurrently, there is a common law presumption that those persons take as joint tenants, unless the testator indicates otherwise in the will.2 However, in some jurisdictions legislation provides that, in the absence of a contrary intention in the will, a gift is presumed to be given to the beneficiaries as tenants in common.3 Notes 1 Crooke v De Vandes (1803) 9 Ves 197; 32 ER 577.2 Re Clarkson; Public Trustee v Clarkson [1915] 2 Ch 216 . The gift may be specific or residuary: Morley v Bird (1798) 3 Ves 628; 30 ER 1192 . As to joint tenancy generally see real property [355-11505]-[355-11540].3 (NT) Law of

1192 . As to joint tenancy generally see real property [355-11505]-[355-11540].3 (NT) Law of Property Act 2000 s 35 (NSW) Conveyancing Act 1919 s 26 (QLD) Property Law Act 1974 s 35 (WA) Administration Act 1903 s 13 (regarding property held under an intestacy for co-owners as tenants in common); (WA) Property Law Act 1969 s 120 (when persons die simultaneously). There are no equivalent provisions in the other jurisdictions. As to tenancy in common see real property [355-11545]-[355-11710]. The paragraph below is current to 20 September 2007 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-1115] Absolute gifts An absolute gift confers sole and complete legal rights with respect to the subject matter of the gift to the extent that the testator is legally capable of passing such an interest in the property.1 Unless a contrary intention appears in the will, a gift of real estate confers the fee simple, or such other interest as the testator possesses, in the real estate.2 An unlimited devise of the rents and profits of land or a gift of the income of the land is prima facie a gift of the land itself.3 Similarly, unless a contrary intention appears in the will, a gift of personal property passes an absolute interest in that property to the beneficiary.4 A gift of the income of a fund of personalty is prima facie a gift of the fund itself.5 Unless the will expressly states that a gift is absolute, the question of whether a gift is absolute is one of construction.6 An absolute gift will not be cut down, 7 unless the words of the will clearly indicate that this was the testators intention.8 A specific application of this is the rule in Lassence v Tierney 9 which states that an absolute gift does not fail because of the invalidity or lapse of any trusts which restricted the gift.10 If the trusts which restricted the absolute gift fail, the gift devolves as the property of the person taking the absolute gift,11 rather than falling into residue or passing on a partial intestacy.12 The rule applies to both dispositions of personal property13 and real property.14 Notes 1 As compared to a conditional gift: see [395-1130]-[395-1145].2 (ACT) Wills Act 1968 s 27 (NT) Wills Act 2000 s 37 (NSW) Wills, Probate and Administration Act 1898 s 24; (NSW) Succession Act 2006 (opn on proc) s 38 (QLD) Succession Act 1981 s 33K (SA) Wills Act 1936 s 31 (TAS) Wills Act 1992 s 37 (VIC) Wills Act 1997 s 42 (WA) Wills Act 1970 s 26(e).

3 Stewart v Garnett (1830) 3 Sim 398; 57 ER 1047 ; Mannox v Greener (1872) LR 14 Eq 456. This may be rebutted by evidence of a contrary intention that a gift only of income was intended: Gardiner v Dessaix [1915] AC 1096 at 1099; (1915) 113 LT 933 per Lord Parker.4 Re McElligott; Grant v McElligott [1944] Ch 216; [1944] 1 All ER 441 .5 Re Dubois [1940] SASR 1 ; Re Woodward [1943] VLR 47 ; Re Brown (decd) [1962] QWN 45 . Compare a gift of the income of a fund to a charity: Congregational Union of New South Wales v Thistlethwayte (1952) 87 CLR 375; [1952] ALR 729 ; Re Williams (decd); Bendigo and Northern District Base Hospital of Bendigo v A-G [1955] VLR 65; [1955] ALR 255 .6 Russell v Perpetual Trustee Co Ltd (1956) 95 CLR 389; [1956] ALR 952 .7 See [395-980].8 Adshead v Willetts (1861) 29 Beav 358; 54 ER 666; Randfield v Randfield (1860) 8 HL Cas 225; 11 ER 414 . Where the testators intention is unclear, the court applies certain rules of construction to resolve the ambiguity: see [395-905]-[395-990].9 Lassence v Tierney (1849) 1 Mac & G 551; 41 ER 1379 .10 Hancock v Watson [1902] AC 14 at 22; [1900-3] All ER Rep 87; [1901] WN 246 per Lord Davey, (If you find an absolute gift to a legatee in the first instance, and trusts are engrafted or imposed on that absolute interest which fail, either from lapse, or invalidity, or for any other reason, then the absolute gift takes effect so far as the trusts have failed to the exclusion of the residuary legatee or the next of kin, as the case may be). As to the doctrine of lapse see [395-1170]-[395-1190].11 Hancock v Watson [1902] AC 14; [1900-3] All ER Rep 87; [1901] WN 246 ; Re Marshall [1928] Ch 661 .12 Hancock v Watson [1902] AC 14; [1900-3] All ER Rep 87; [1901] WN 246 ; Re Marshall [1928] Ch 661 . As to the residuary estate see [395-4815]-[395-4845]. As to partial intestacy see [395-2070]-[395-2095].13 Fisher v Wentworth (1925) 36 CLR 310; [1926] ALR 129 ; Rogers v Rogers (1916) 21 CLR 296 ; Duncan v Equity Trustees Executors and Agency Co Ltd (1958) 99 CLR 513; 32 ALJ 238 at 240 ; Russell v Perpetual Trustee Co Ltd (1956) 95 CLR 389; [1956] ALR 952 ; Williamson v Carter (1935) 54 CLR 23 ; Perpetual Trustee Co Ltd v Gilmour [1979] 2 NSWLR 716 ; Re Cowlishaw (decd); Cowlishaw v Queensland Trustees Ltd [1959] 2 Qd R 67, SC(QLD), Full Court; Dally v Dally [1954] Tas SR 12 , SC(TAS), Full Court; Re Panter; Equity Trustees Co v Marshall [1948] VLR 177; [1948] 2 ALR 14 ; Perpetual Trustee Co Ltd v Marsh (1938) 38 SR (NSW) 415; 55 WN (NSW) 151 ; Re Bishop; Public Trustee v Bishop [1928] SASR 302 ; Re Benjamin; Mason v Benjamin [1926] VLR 378 ; Re Robertson [1925] VLR 481 ; Cain v Watson [1910] VLR 256; (1910) 16 ALR 76 ; Re McBean (decd) (1973) 7 SASR 579 ; Dally v Dally [1954] Tas SR 12 .14 Moryoseph v Moryoseph [1920] 2 Ch 33; [1920] All ER Rep 216 . The paragraph below is current to 20 September 2007 [395-1120] Limited interests A gift of a limited interest in property confers on the beneficiary an interest in the property which subsists only during the beneficiarys lifetime, in the case of a life interest, or until some defining event such as marriage.1 A gift of a determinable life interest confers a life interest which subsists until the occurrence of a certain event, such as marriage or bankruptcy.2 Where a gift is given to a beneficiary as a life interest with a right to dispose of the gift after death, the interest may still be characterised as a life interest rather than an absolute interest.3 Notes 1 Coward v Larkman [1886-90] All ER Rep 896; (1888) 60 LT 1, HL; Public Trustee v Edmond (1912) 32 NZLR 202 ; National Trustees, Executors & Agency Co Ltd v Keast (1896) 22 VLR 447 ; Public Trustee v Young (1980) 23 SASR 239 .2 Zapletal v Wright [1957] Tas SR 211 ; Re Mason; Mason v Mason [1910] 1 Ch 695 ; Re Bodington; Bodington v Clairat (1884) 25 Ch D 685 , CA.3 In the Will of Comstock; Comstock v Worrall [1918] VLR 398; (1918) 24 ALR 164 ; Re Rollings (1974) 9 SASR 418 . Compare [395-1130]-[395-1145] (conditional gifts). As to absolute interests see [395-1115]. See also Weaver v Brashear [2005] ACTSC 79; BC200506017 ; Avanes v Marshall [2007] NSWSC 191; BC200701448 ; Dunn v Carter [2004] NSWSC 862; BC200406200 ; White v Arizon Pty Ltd [2003] NSWSC 1051; BC200306800 ; Hatzantonis v Lawrence [2003] NSWSC 914; BC200306172 ; Firriolo v Firriolo [2000] NSWSC 1039; BC200006803 ; Motum v Motum [1999] NSWSC 761;

BC9904187 ; McElroy v Griffiths [2003] WASC 267; BC200308110 ; Jenks v Harley and Harley (unreported, SC(WA), Rowland J, 3 September 1993, BC9301434). The paragraph below is current to 20 September 2007 [395-1125] Vested or contingent gifts A gift in a will may be vested or contingent. If there are no preconditions to entitlement the gift is vested from the outset.1 Where a gift in a will is subject to the occurrence of a specified event, the gift is a conditional gift subject to a condition precedent.2 If upon construction of a conditional gift in the will, the term vest means the conferral of indefeasible rights in the gift subject only to divesture3 upon the occurrence of a specified event, the gift is affected by a condition subsequent.4 If a person with a vested interest in a gift dies, the interest passes to his or her personal representative, unlike vested interests which do not devolve upon the beneficiary until the condition attached to the gift is satisfied.5 The court leans in favour of vesting in the case of gifts of real property, under the rule in Borastons Case.6 Notes 1 Marks v Trustees Executors & Agency Co Ltd (1948) 77 CLR 497 ; In the Will of Mudie; Beattie v Mudie [1916] VLR 265 ; Re Bruce; Bruce v Bruce [1949] Tas SR 79 .2 Re Whitson; Whitson v Woolley [1924] 1 Ch 122. See further [395-1130]. Where a gift of a limited property interest is given to a beneficiary with a condition that the gift passes absolutely if the beneficiary dies, the court generally interprets the provision as providing for the passing of the gift in the event of the beneficiary dying before the testator: Penny v Railways Cmr [1900] AC 628 at 634; (1900) 69 LJPC 113; 83 LT 182 per Lord Lindley.3 A conditional gift is divested when a person ceases to have a vested interest in the gift by operation of the terms of the gift. Divesting conditions in gifts are interpreted strictly: Thompson v Ahern [1958] Qd R 504 , Full Court; Tarbuck v Tarbuck (1835) 4 LJ Ch 129; Cox v Parker (1856) 22 Beav 168; 52 ER 1072; Potts v Atherton (1859) 28 LJ Ch 486 at 488; Re Pickworth; Snaith v Parkinson [1899] 1 Ch 642 , CA.4 Berkeley v Swinburne (1848) 16 Sim 275 at 281-2; 60 ER 880 per Shadwell VC; Best v Williams [1890] WN 189. See further [395-1130].5 Re Eve; Belton v Thompson (1905) 93 LT 235 (consequence of interest in legacy being contingent was that beneficiarys personal representative takes no interest if beneficiary dies before satisfying condition attached to the gift); Re Blackwell; Blackwell v Blackwell [1926] Ch 223 .6 Borastons Case (1587) 3 Co Rep 16a; 76 ER 664 ; Phipps v Ackers (1842) 9 Cl & Fin 583; 8 ER 539 . See also Kauter v Kauter [2003] NSWSC 741; BC200304481 ; Application of Hayes; Estate of Johnston [2000] NSWSC 1097; BC200007322 ; Watson v Watson [1999] NSWSC 325; BC9901621 ; Fraser v Fraser [2003] 1 Qd R 367; [2001] QSC 490; BC200108114 ; Burman v Burman [1998] QCA 250; BC9804376 ; Bradshaw v Bradshaw [2003] TASSC 138; BC200307815 ; Public Trustee v Donoghue [1999] TASSC 147; BC9908378 .

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II INTESTACY (1) INTRODUCTION The paragraph below is current to 21 June 2006 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-1500] Intestacy A person is said to die intestate where no effective will has been left to dispose of the persons property on death.1 The person may die totally intestate or partially intestate (where a will disposes of only part of the persons property). In either case there are statutory rules which provide for the distribution of the persons property in the absence of an effective will.2 These rules, referred to generally as schemes of distribution on intestacy, or rules of descent or inheritance of property, determine who is to receive an intestates property and how much each is to receive. The rules are default provisions which distribute the estate of a deceased person in the absence of an effective testamentary disposition by that person. A declaration by a testator that the next of kin is not to benefit from the will does not displace the statutory rules if the testator leaves property undisposed of by will.3 However a declaration by a testator that the next of kin is not to benefit at all may be construed as gift by implication to the person next in line after the next of kin. In the former the testator has intended to dispose of all of his or her property but has not effectively done so. The declaration is a mere reason for excluding the next of kin. In the latter case the testator has contemplated dying intestate.4 Notes 1 For the meaning of intestate see Butterworths Encylopaedic Australian Legal Dictionary. 2 (ACT) Administration and Probate Act 1929 Pt 3A Divs 1-3 (NT) Administration and Probate Act 1969 Pt III Divs 4, 5 (NSW) Wills, Probate and Administration Act 1898 Pt 2 Div 2A (QLD) Succession Act 1981 Pt 3 (SA) Administration and Probate Act 1919 Pt 3A

(TAS) Administration and Probate Act 1935 Pt V (VIC) Administration and Probate Act 1958 Pt I Div 6 (WA) Administration Act 1903 Pt II. 3 Muir v Archdall (1918) 19 SR (NSW) 10 at 15 . The paragraph below is current to 21 June 2006 To update legislation see ACL Legislation [395-1505] Historical background The principal source of the Australian statutory schemes is the (IMP) Statute of Distributions 1670.1 This Act governed the distribution of personal estate 2 which was otherwise undisposed of by will.3 Where the (IMP) Statute of Distributions 1670 applied only to personal property, the descent of real property was determined by its own rules. Succession to real estate required the calculation of who was the heir-at-law according to what was known as the Canons of Descent.4 The descent of real estate was also affected by the doctrines of dower and curtesy which provided special lifetime rights to the widow and widower respectively in relation to their deceased spouses real estate.5 The rules were codified in the (IMP) Inheritance Act 1833 which was expressly adopted in the then Australian colonies.6 Notes 1 22 & 23 Car II c 10: amended in 1685 by 1 Jac II c 17.2 For the meaning of personal estate see Butterworths Encylopaedic Australian Legal Dictionary.3 At the time of British settlement of Australia a will could be made under English law with respect to the entire personal estate of a deceased person, subject to exceptions at that time in relation to criminals and married women. Under English law this only became a principle of general application in 1724 when the last survival of an old doctrine, requiring fixed shares to widow and children, was removed: 2 Geo I c 18.4 3 & 4 Will 4 c 106.5 Dower provided a widow a life interest in one-third of the realty of her deceased husband, which their issue might inherit: see definition of dower in Butterworths Encylopaedic Australian Legal Dictionary. Curtesy was the husbands right in his wifes lands for the duration of his life: see definition of curtesy in Butterworths Encylopaedic Australian Legal Dictionary. 6 3 & 4 Will 4 c 106. Applied in New South Wales (in which Victoria and Queensland were then included): 7 Will 4 No 8; Vict No 9. As to the adoption of the rules in South Australia see 35 & 36, in Tasmania see 6 Will 4 No 16, in Western Australia see 4 Will 4 No 4. The paragraph below is current to 21 June 2006 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-1510] Modern developments The rules for inheritance of real property were gradually overtaken by the scheme for personal property under the (IMP) Statute of Distributions 1670 in an assimilation of rules at the end of the nineteenth century in the Australian jurisdictions,1 and in 1925 in the United Kingdom.2 Although amended considerably over time, the modern codes still reflect the basic structure of the Statutes of Distribution in their primary provision for the spouse and children with next of kin taking in a strictly defined order of priority, with the Crown ultimately entitled in the absence of heirs,3 in the equality of children, 4 and in the accounting of .4 Muir v Archdall (1918) 19 SR (NSW) 10 at 15

advancements.5 Intestate succession law in the Australian jurisdictions has been affected by the major English reforms of 1925, including the (UK) Trustee Act 1925, (UK) Law of Property Act 1925 and the (UK) Administration of Estates Act 1925. The significant features of the latter Act in relation to intestate distribution were: (1) the inclusion of a statutory legacy for the surviving spouse, as well as an entitlement to the personal chattels;6 and (2) the limitation of next of kin to those no more remote than grandparents or descendants of grandparents. These features can be seen to form the backbone of the modern intestate schemes of distribution in Australia. The principal trends in relation to intestate succession have been the increasing primacy given to the surviving spouse, the inclusion, in some jurisdictions, of relationships other than relationships of formal marriage7 and, in most jurisdictions, a contraction of eligible next of kin. 8 Notes 1 (NSW) Real Estate of Intestates Distribution Act 1862 (repealed) (QLD) Intestacy Act 1877 (repealed) (SA) Intestate Real Estates Distribution Act 1867 (repealed) (TAS) Deceased Persons Estates Duties Act 1931 (repealed) (VIC) Intestates Real Estate Act 1864 (repealed) (general law land); (VIC) Act No 223 (1864) (repealed) (Torrens title land) (WA) Real Estates Administration Act 1893 (repealed). 2 (UK) Administration of Estates Act 1925. 3 The statutory legacy for a widow had first been included in the (UK) Intestates Estates Act 1890 (53 & 54 Vict c 29).4 As to status of children and proof of paternity see [395-1585], [395-1590].5 As to children see [395-1580]-[395-1600].6 As to statutory legacy and chattels see [395-1770], [395-1775].7 As to de facto spouses see [3951615]-[395-1640].8 As to next of kin see [395-1910].

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(II) Administration with the Will Annexed The paragraph below is current to 06 January 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-3185] Circumstances in which a grant may be made A grant of administration with the will annexed (otherwise known as administration cum testamento annexo) installs a courtappointed administrator who is thereby vested with the testators property1 and authorised and required to administer that testators estate in accordance with the terms of the testators will. It is the appropriate grant to seek whenever a deceased leaves a will but either fails to appoint an executor,2 or appoints an executor who is unable or unwilling to act3 or who is disqualified from obtaining a grant.4 Citation to take probate is not necessary in order to prove that a named executor is unwilling to act,5 although renunciation of probate and failure to obtain a grant after citation will disqualify such a named executor.6 Absence from the jurisdiction is not necessarily a bar to obtaining a grant of probate.7 However, where a named executor is absent, the named executors resident attorney under power,8 or nominee,9 having the relevant authority,10 may apply for a grant. In such a case, the grant is of administration with the will annexed, although a grant made to an attorney or nominee is usually made to the grantee on behalf of the named executor and for that executors use and benefit.11 A grant of administration with the will annexed is not appropriate in the case of a sole appointed executor who is a minor at the date of grant12 or who is insane at the time of grant,13 and is not necessarily applicable in the case of an appointed executor who is out of the jurisdiction and will remain so for a time after the death of the deceased.14 The will should be identified and may be required to be exhibited to the affidavit evidence supporting the application.15 Notes 1 (ACT) Administration and Probate Act 1929 s 39(a) (NT) Administration and Probate Act 1969 s 52

(NSW) Probate and Administration Act 1898 s 41 (QLD) Succession Act 1981 s 45 (SA) Administration and Probate Act 1919 ss 5(2), 46 (TAS) Administration and Probate Act 1935 ss 4, 22 (VIC) Administration and Probate Act 1958 ss 13(1), 25 (WA) Administration Act 1903 s 8. 2 For an example where the court made a grant of administration cum testamento annexo in respect only of that part of a propounded will which the evidence established that the testator knew and approved of, but thereby excluding that part which purported to appoint an executor, see Astridge v Pepper [1970] 1 NSWR 542 . A testamentary instrument dealing with only part of the testators estate and appointing executors in respect of that part only, may not amount to a general appointment of an executor: In the Will of Dillon (decd) (1886) 12 VLR 273; 7 ALT 138. In some instances a will which does not specifically appoint an executor may nevertheless charge certain persons with executorial-type duties of a nature which the court will interpret as sufficient to operate as an appointment of that person or those persons as executor (executor according to the tenor), and grant probate accordingly.3 For example, where the named executor renounces probate, dies before grant, or is incapable through infirmity: Re Legh (decd) (1889) 15 VLR 816; 11 ALT 99 . As to the special instance where the sole person appointed executor is under a legal disability on account of lack of age at the date a grant of representation would be made see [395-3210]-[395-3225]. See also In the Will of Sahl (1897) 7 BC (NSW) 71 (sole named executor renounced probate because he was unwilling to act alone, but was granted administration cum testamento annexo jointly with another person); Re Boden [1933] QWN 34 .4 For example, through renunciation of probate, conviction and imprisonment of the executor, failure to obtain a grant of probate after being cited to do so, or lack of status (for example, a non-trustee company: see [395-3070]). See also In the Will of Wilson (1945) 45 SR (NSW) 342; 62 WN (NSW) 143 (applicant who was appointed executor subject to a condition which failed, was nevertheless subsequently granted administration cum testamento annexo).5 In the Estate of Shephard (decd) (1982) 30 SASR 1 ; Re Randall (decd) [1927] VLR 535; [1927] ALR 395; (1927) 49 ALT 89 .6 (ACT) Administration and Probate Act 1929 s 20(1)(a), 20(1)(c) (NT) Administration and Probate Act 1969 s 28 (NSW) Probate and Administration Act 1898 s 69. See also (NSW) Supreme Court Rules Pt 78 r 14(1) (a person who renounces probate or administration may not be granted administration in another capacity). (QLD) Succession Act 1981 s 46(c). See also Re Boden [1933] QWN 34 displaced; decided prior to the current Act). (the rule may be

(SA) Administration and Probate Act 1919 s 36(c). However, see also (SA) Probate Rules 2004 R 48 (entitlement of such person to a grant of administration cum testamento annexo in a different capacity); Re Goods of Saxon (1872) 6 SALR 52 (decided in respect of earlier legislation; determined that a statutory prohibition against making a grant to a renouncing executor in another capacity bound the Registrar, but not the court). (TAS) Administration and Probate Act 1935 s 8(b). Note, however, (TAS) Probate Rules 1936 r 67 (permits a renouncing executor to take a grant in another capacity with leave of the court, and together with (TAS) Administration and Probate Act 1935 s 9 permits withdrawal of a renunciation, also by leave). (VIC) Administration and Probate Act 1958 s 16(1)(b), 16(2) (a renouncing named executor may by leave of the court withdraw a renunciation of probate and seek to prove the will, even after a

grant of administration cum testamento annexo has been made in favour of another person). See also In the Will of Boardman (1879) 5 VLR (IP & M) 70 (grant of probate made to executors who, three months earlier, had filed a deed of renunciation, no other person having applied for probate in the meantime). (WA) Administration Act 1903 s 32. See further (WA) Non-contentious Probate Rules r 28 (a renouncing executor may not seek a limited or special grant of administration (including administration with the will annexed) in the same estate in another capacity, without leave of the court). 7 In the Estate of Kruttschnitt (decd) (1942) 42 SR (NSW) 79; 59 WN (NSW) 40 .8 Bath v British and Malayan Trustees Ltd [1969] 2 NSWR 114; (1969) 90 WN (Pt 1) (NSW) 44 ; Re Matijevic (decd) [1969] QWN 13 . See also: (ACT) Administration and Probate Act 1929 s 22 (subject to the terms of the grant, it continues in force notwithstanding the death of the donor of the power) (NT) Administration and Probate Act 1969 s 31 (unless the grant of administration otherwise provides in its terms, the grant continues in force notwithstanding the death of the donor of the power) (NSW) Probate and Administration Act 1898 s 72 (unless the grant of administration otherwise provides in its terms, the grant continues in force notwithstanding the death of the donor of the power) (QLD) Succession Act 1981 s 6(2) (SA) Administration and Probate Act 1919 s 34 (such an absent executor may also appoint the Public Trustee to take a grant on that named executors behalf) (TAS) Probate Rules 1936 r 42 (specifically empowers the making of a grant to a duly constituted attorney under power of a non-resident nominated executor). There are no equivalent provisions in Victoria and Western Australia. Compare (WA) Administration Act 1903 ss 33, 34 (where infant executor, guardian may be appointed in their place). 9 See, for example, In the Will of Morkill (1900) 17 WN (NSW) 46 (power of attorney defective); Re Kenny (1898) 9 QLJ (NC) 38 (power of attorney defective); Re Allison (1900) 1 N & S 169; Re Moses (decd) (1931) 48 WN (NSW) 104 (following renunciation).10 The instrument appointing the attorney must be sufficiently wide in its terms to permit the grant to be made to the attorney: see In the Estate of Jones (1900) 21 LR (NSW) B & P 35; 17 WN (NSW) 181 .11 The fact that a grant is made or limited for one partys (or for a named executors) use and benefit does not mean that the grant does not enure for all beneficiaries, and the liability of the grantee extends to require an accounting of the administration to be made to all beneficiaries and not just the donor of the power: Re Cookes Will (1899) 9 QLJ 133 . See, however, Re Boyds Will (1901) 11 QLJ (NC) 17 .12 The application to be made is for administration during minority: see [395-3210]. Note, however, that the legislation of the Northern Territory, New South Wales and Victoria refer to such a grant as being administration with the will annexed. See: (NT) Administration and Probate Act 1969 s 30(1) (NSW) Probate and Administration Act 1898 s 70(a) (VIC) Administration and Probate Act 1958 s 26(1). 13 As to a grant where there is an unsound mind see [395-3250].14 See [395-3070] note 10 (the

material at that note applies to a general grant of administration, but the same principles apply to a grant of probate).15 (ACT) Court Procedures Rules 2006 rr 3005(3), 3010(2) (QLD) Uniform Civil Procedure Rules 1999 rr 602, 606 (SA) Probate Rules 2004 R 15 (TAS) Probate Rules 1936 r 65 (although the rule required the will or other writing to be signed, it does not require it to be exhibited to standard affidavit evidence supporting the application) (VIC) Supreme Court (Administration and Probate) Rules 2004 rr 2.04, 3.02 (WA) Non-contentious Probate Rules r 12 (although such will or other document must be marked in accordance with the rule, it need not be exhibited to any affidavit other than an affidavit (if any) relating to the validity, terms, conditions or date of execution of the will) There are no equivalent provisions in the Northern Territory and New South Wales. See, however, (NT) Supreme Court Rules rr 88.23(6), 88.25(1)(b); (NT) Supreme Court Rules Sch Form 88Q cl 2 (affidavit of applicant for administration with the will annexed) which requires the will to be exhibited to that affidavit (NSW) Supreme Court Rules Pt 78 rr 24(1)(a), 26(1)(b), Sch F Form 97 para 2. The paragraph below is current to 06 January 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-3190] Persons who may apply Except in South Australia and Tasmania, the court has broad discretion as to whom it might appoint as administrator with the will annexed.1 The general principle to be applied in determining whether a grant should be made to a given applicant and, in particular, between competing applicants, is the due and proper administration of the estate and the interests of the parties beneficially entitled to the estate.2 Within those limits, the priority of applicants for a grant of administration with the will annexed follows those applying to applicants for a grant of letters of administration upon total intestacy,3 namely, that the priority rights reside, distributively, in those who will be entitled to the greatest interest in the estate.4 In the absence of special circumstances, a grant will not be made to an undischarged bankrupt.5 In the case of a solvent estate, a grant will be made to a residuary legatee in preference to a creditor.6 A grant will not usually be made to an applicant whose appointment would create a conflict of interest with the appointees duties to the estate.7 The Public Trustee is entitled as of right to a grant of administration with the will annexed where a named executor has either in the prescribed form renounced probate8 or appointed the Public Trustee to take out a grant.9 In South Australia and Tasmania, the rules set out a specific order of priority for persons seeking a grant of administration with the will annexed.10 Notes 1 (ACT) Administration and Probate Act 1929 s 24(b), 24(c) (some person). Note also ibid s 25 (limits to any person interested in the estate or to a creditor of the testator, the class of persons to

whom a grant of administration with the will annexed may be made, consequent upon the named executors failure to comply with an order to show cause why the grant should not be made, the order itself being made where either the executor has neglected or omitted to prove the will, or where such executor cannot be found). (NT) Administration and Probate Act 1969 s 33 (some person). Note also ibid s 34 (limits the classes of persons to whom a grant may be made to any person interested in the estate, to a professional personal representative or to a creditor of the testator the persons to whom a grant of administration with the will annexed might be made in the case of the executors neglect or omission to prove the will, or where such executor cannot be found). (NSW) Probate and Administration Act 1898 s 74 (some person). Note also ibid s 75 (limits the classes of persons to whom a grant may be made to any person interested in the estate, the NSW Trustee or a trustee company, or to a creditor of the testator, the persons to whom a grant of administration with the will annexed might be made in the case of the executors neglect or omission to prove the will, or where such executor cannot be found). (QLD) Succession Act 1981 s 6(3). There are no equivalent provisions in Victoria, although (VIC) Administration and Probate Act 1958 s 25 provides for grants to be made in every case where such grant has previously been customary. Note, however, ibid s 15 (where a named executor or person having possession of a will neglects to take certain action, the court may appoint as administrator with the will annexed any party interested under such will or in the estate or the State Trust, or any creditor of the testator who has sought certain antecedent orders against that named executor or person having possession of the will). In Western Australia, the legislation differentiates between situations where, on the one hand, the testator failed to appoint an executor or the nominated executor is unwilling or not competent to act or is outside Western Australia (see (WA) Administration Act 1903 s 36 (the court may appoint an administrator)) and, on the other hand, where the nominated executor fails to obtain or to renounce the right to a grant, is unknown or cannot be located: ibid s 37 (the court may, upon the application of any person interested in the estate, or of any creditor of the testator, grant administration with the will annexed to the applicant). 2 Bath v British and Malayan Trustees Ltd [1969] 2 NSWR 114 at 118; (1969) 90 WN (Pt 1) (NSW) 44 at 49 ( citing with approval In the Goods of Loveday [1900] P 154 at 156; (1900) 82 LT 692 per Jeune P). See also Re Legh (decd) (1889) 15 VLR 816; 11 ALT 99 (sole executor and beneficiary incapable, but indicated strong preference against a potential applicant); Butler v Meriga [1904] St R Qd 248 (grant made to defendant in an administration suit which was successfully brought to revoke a grant made to the defendant earlier in respect of another will); Re Swale [1940] SASR 391 (grant made to the executor of a nominated executor who predeceased the testator, but had promised the testator he would nevertheless make the application; the application was supported by a majority of the devisees).3 As to entitlement to grant see generally [395-3065], and priorities for competing applications see [395-3075], [3953080]. See also: (NT) Supreme Court Rules rr 88.24(1)(b)(xi), 88.25(1)(a) (QLD) Uniform Civil Procedure Rules 1999 r 610 (VIC) Supreme Court (Administration and Probate) Rules 2004 r 3.02(2)(b) (WA) Non-contentious Probate Rules r 8(ix). The procedures are not applicable in New South Wales, where any applicant must file consents of

all other devisees or notices clearing off claims, although the question of priorities will arise in the event of competing claims: see [395-3075]. There are no equivalent provisions in the Australian Capital Territory, South Australia and Tasmania. 4 In the Will of Gordon (1884) 6 ALT 84 ; Re Brown [1948] QWN 25 ; In the Will of Bouveret (decd) (1888) 10 ALT 172. The interest may have been obtained by assignment from the beneficiaries: In the Will of Reilly (1907) 24 WN (NSW) 164 . Where necessary, the court will interpret the will so far as is necessary in order to determine the existence and extent of the applicants interest in the will; such a determination may not be final for any purpose other than establishing an entitlement to a grant: In the Will and Estate of Malin [1905] VLR 270; (1905) 11 ALR 129; 26 ALT 200 . For an example where a grant of administration cum testamento annexo was made to a substitute executor with the consent of the named executor see In the Will of Barclay (1877) 3 VLR (IP & M) 59 . For an example of the court making a grant of administration to a stranger, due to the particular circumstances of the case, see Re Swale [1940] SASR 391 ; In the Will of Ruane [1959] QWN 32 ; Re Haselgrove [1950] SASR 99 . A corporation aggregate, even though it is a beneficiary, must proceed by way of a syndic: In the Will of Docker (1976) 12 ALR 521; 27 FLR 345 ; Re Edwards (decd) [1946] VLR 71; [1946] ALR 100 ; Re Layland [1930] VLR 300 ; Re Randall (decd) [1927] VLR 535; [1927] ALR 395; (1927) 49 ALT 89 . See, however, In the Will of Basse [1909] VLR 313; (1909) 15 ALR 302 . As to syndics see further [395-3070].5 In the Estate of Nowland (decd) (1906) 6 SR (NSW) 289 .6 Re Fergusson (1896) 2 ALR 155 .7 Re Pierce (decd) (1886) 12 VLR 733 ; Rosenblum v Gridiger (unreported, SC(NSW), Holland J, 24 June, 1980).8 (NSW) Supreme Court Rules Pt 78 r 26(3). See also (NSW) Probate and Administration Act 1898 s 75A (delegation to the NSW Trustee or a trustee company by existing executors and administrators). (QLD) Public Trustee Act 1978 s 29(1) (entitlement if the executor has renounced) There are no equivalent provisions in the Australian Capital Territory and Tasmania. However, (ACT) Administration and Probate Act 1929 s 88(1) gives the court the power to grant the Public Trustee an order to collect and administer the estate of a deceased person in a significant range of circumstances including renunciation by all named executors, together with a filed refusal by all other persons primarily entitled to administration. Such an order, upon being made, has the effect of a grant of administration: ibid s 89(1). In Tasmania, the (TAS) Public Trustee Act 1930 ss 17-19 sets out a range of instances where the Public Trustee is entitled to a grant as of right. 9 (NT) Public Trustee Act 1979 s 33 (the appointment requires the consent of the court) (SA) Public Trustee Act 1995 s 9(1)(h) (VIC) Trustee Companies Act 1984 (applies to all authorised trustee companies under the Act and extends to include post-grant appointments) (WA) Public Trustee Act 1941 s 12. 10 (SA) Probate Rules 2004 R 31 (in general terms, the sequence is: executor, residuary beneficiary, specific beneficiary, creditor) (TAS) Probate Rules 1936 r 21 (in general terms, the sequence is: residuary legatee in trust, takers of residuary life interests, general residuary legatees, the personal representatives of general residuary legatees, legatees or creditors, contingent legatees, the Crown). The paragraph below is current to 06 January 2012 To update legislation see ACL Legislation

For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-3195] Documenting the application The rules of court of the various jurisdictions prescribe the documentation necessary for an application for an informal grant of administration with the will annexed.1 Notes 1 For the most part, the documentation is as for an application for probate, varied to take account of the fact that the applicant has not been named by the testator as the executor: (ACT) Court Procedures Rules 2006 rr 3005, 3010(2) (NT) Supreme Court Rules r 88.25 (NSW) Supreme Court Rules Pt 78 r 26 (QLD) Uniform Civil Procedure Rules 1999 rr 602, 606 (SA) Probate Rules 2004 RR 6, 7, 8, 11, 27 (TAS) Probate Rules 1936 rr 29-31, 61-65 (VIC) Supreme Court (Administration and Probate) Rules 2004 r 3.02 (WA) Non-contentious Probate Rules rr 6, 8, 9B, 11-19.

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(C) Investment The paragraph below is current to 28 July 2011 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-4465] Personal representatives duty in equity In common with all trustees, a personal representative has a general duty at equity to make the estate productive for the benefit of the beneficiaries,1 and may be held personally liable for any loss to the estate arising from breach of that duty.2 It has been suggested that (subject to the terms of the trust instrument) trust money should not be left uninvested for more than six months.3 Invest, in the context of the power held by a trustee, means to apply money in the purchase of some property from which profit or interest is expected, and which property is purchased in order to be held for the sake of the income which it will yield.4 Unless expressly excused by the will, investments must carry interest5 and be made on the security of property of adequate value.6 Due diligence obligations imposed upon trustees by statute do not modify these principles.7 Notes 1 As to the duty to make the estate productive see [395-4195]. See also trusts [430-4490].2 As to the duty to make the estate productive see [395-4195].3 Cann v Cann (1884) 51 LT 770; 33 WR 40.4 Re Wragg; Wragg v Palmer [1919] 2 Ch 58; [1918-19] All ER Rep 233 . See also Estate of Graham (decd),Re (2009) 105 SASR 95; (2009) 265 LSJS 191; [2009] SASC 278; BC200908138 . See generally trusts [430-4510] note 1.5 Khoo Tek Keong v Chng Joo Tuan Neoh (decd) [1934] AC 529; (1934) 152 LT 53 .6 Khoo Tek Keong v Chng Joo Tuan Neoh (decd) [1934] AC 529; (1934) 152 LT 53 . It is not to the point that the testator was in the habit of making unsecured loans: Khoo Tek Keong v Chng Joo Tuan Neoh (decd) [1934] AC 529 at 535-6; (1934) 152 LT 53 .7 (ACT) Trustee Act 1925 s 14B (NT) Trustee Act 1893 s 7(1) (NSW) Trustee Act 1925 s 14B(1) (QLD) Trusts Act 1973 s 23 (SA) Trustee Act 1936 s 8(1) (TAS) Trustee Act 1898 s 9(1) (VIC) Trustee Act 1958 s 7(1) (WA) Trustees Act 1962 s 19(1). The paragraph below is current to 28 July 2011 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-4470] Powers pursuant to statute All jurisdictions have enacted comprehensive legislation dealing with the powers of trustees1 to invest trust property. With certain exceptions

and qualifications, trustees have a discretionary power to invest in any class of investment,2 subject to a due diligence obligation.3 The trustee becomes personally liable for losses arising from a breach of that obligation.4 All investments must be reviewed at least annually, 5 and may be varied at any time.6 Tasmania also makes specific provision authorising investment of the residue of the estate of a person who dies wholly or partly intestate, pending completion of administration, or during the minority of any beneficiary or the subsistence of any life interest.7 Notes 1 The legislation of each jurisdiction includes personal representatives of deceased persons in the definition of trustee for this purpose see [395-4450].2 (ACT) Trustee Act 1925 s 14 (NT) Trustee Act 1893 s 5. (NSW) Trustee Act 1925 ss 14-14F. (SA) Trustee Act 1936 s 6 (TAS) Trustee Act 1898 s 6. As to the investment of the residuary estate of an intestate see also (TAS) Administration and Probate Act 1935 s 33(3). (VIC) Trustee Act 1958 s 5. As to the investment of the residuary estate of an intestate see also (VIC) Administration and Probate Act 1958 s 38(3). (QLD) Trusts Act 1973 s 21 (unless expressly forbidden by the instrument creating the trust). For matters to which a trustee must have regard in exercising power of investment: ibid s 24(1). (WA) Trustees Act 1962 s 17 As to the detail, nature and effect of this legislation and the qualifications and exceptions which pertain to it see trusts [430-4520], [430-4525], [430-4545]-[430-4640]. 3 See trusts [430-4545]-[430-4555].4 See trusts [430-4545], [430-4555].5 See trusts [4304545].6 See trusts [430-4545].7 (TAS) Administration and Probate Act 1935 s 33(3).

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(4) EXERCISE OF COURTS DISCRETION

This chapter was updated by Bonnie Allan BA LLB(ANU), Grad Dip Legal Practice(ANU) Casual Lecturer/Tutor, Australian National University

(A) General Principles The paragraph below is current to 16 May 2012 For new cases see ACL Reporter To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-6875] Introduction If the court concludes that it has jurisdiction in a given case and that an applicant has been left without adequate provision for proper maintenance, education or advancement in life,1 the court has a wide power to make such orders for provision as it thinks fit in all the circumstances of the case.2 The court may also refuse to make an order in certain circumstances.3 Where the jurisdictional question is assessed as at the date of death, 4 the discretionary question is assessed as at the date of the hearing.5 In New South Wales, the legislation specifies matters which may be considered in exercising the discretionary powers under the legislation together with any other matters which the court considers relevant.6 In the Australian Capital Territory and Victoria, the legislation indicates that certain matters must be taken into account.7 In exercising its discretion under the legislation the court is not entitled simply to make a new will for the testator, or a will for an intestate.8 The court can only exercise its discretion within the limits of the legislation.9 In all jurisdictions, the family provision legislation expressly allows the court to make an order in the form of a lump sum, periodical payment or other payment.10 The court has a wide discretion in respect of the terms of an order for periodical payment.11 Such payments may be indexed,12 and automatically cease upon the death of the person benefiting from the payments.13 In New South Wales, the court may make provision through: (1)

specified existing or future property;14 (2) an absolute or limited interest in property;15 or (3) any other manner which the court thinks fit.16 In Tasmania, the court may make an order for provision by way of a life interest or lesser interest in a dwelling-house, including a house purchased by order of the court from assets of the estate.17 In Western Australia, the court may make an order for family provision under the (WA) Trustees Act 1962 18 rather than the (WA) Inheritance (Family and Dependants Provision) Act 1972, if the deceaseds estate has been wholly or partly distributed to beneficiaries.19 In all jurisdictions, the family provision legislation allows the court to impose any conditions on an order which it thinks fit.20 However, the conditions must not breach common law rules, unless legislation expressly provides otherwise.21 The court may require the applicant to waive his or her existing rights.22 In the Australian Capital Territory, the Northern Territory and New South Wales, a condition may be attached to an order made in relation to the estate of a person who is presumed to be dead, that if the person is subsequently found to be alive, restitution or restoration of the property must be made by the applicant.23 In Tasmania and Victoria, the court may impose conditions to prevent, restrict or defeat an alienation of, or charge on, the benefit of any provision made under the order.24 Notes 1 As to the needs of an applicant see [395-6705], [395-6710].2 (ACT) Family Provision Act 1969 s 8(1) (NT) Family Provision Act 1970 s 8(1) (NSW) Succession Act 2006 s 59 (QLD) Succession Act 1981 s 41 (SA) Inheritance (Family Provision) Act 1972 s 7(1) (TAS) Testators Family Maintenance Act 1912 s 3(1), 3(2) (a lump sum payment or life estate or lesser interest only) (VIC) Administration and Probate Act 1958 s 91 (WA) Inheritance (Family and Dependants Provision) Act 1972 s 6(1). The (WA) Inheritance (Family and Dependants Provision) Amendment Act 2011 was passed on 25 October 2011. The substantive provisions do not come into effect until the day set by proclamation, and no day had been set as of the time of publication. The amending Act renames the principal Act the (WA) Family Provision Act 1972. 3 As to disentitling conduct see [395-6910], [395-6915].4 In New South Wales the circumstances

are assessed as at the date of the hearing: (NSW) Succession Act 2006 s 59(1)(c).5 Coates v National Trustees Executors and Agency Co Ltd (1956) 95 CLR 494; [1956] ALR 739; (1956) 30 ALJ 231 . See also Churton v Christian (1988) 13 NSWLR 241; 12 Fam LR 386 , CA(NSW).6 (NSW) Succession Act 2006 s 60.7 (ACT) Family Provision Act 1969 s 8(2), 8(3) (VIC) Administration and Probate Act 1958 s 91(4) and see [395-6556]. 8 Bosch v Perpetual Trustee Co Ltd (1938) 38 SR (NSW) 176; [1938] AC 463 at 477-8; [1938] 2 All ER 14 , PC; Worladge v Doddridge (1957) 97 CLR 1 at 12; [1957] ALR 691 per Williams and Fullagar JJ; Pontifical Society for the Propagation of the Faith v Scales (1962) 107 CLR 9 at 19; [1962] ALR 775; (1962) 36 ALJR 1 per Dixon CJ; Hughes v National Trustees, Executors and Agency Co of Australasia Ltd (1979) 143 CLR 134 at 146; 23 ALR 321; 53 ALJR 249 per Gibbs J; Hunter v Hunter (1987) 8 NSWLR 573 at 576 per Kirby P, CA(NSW); Re Allardice; Allardice v Allardice (1910) 29 NZLR 959; 12 GLR 753 (affirmed Allardice v Allardice [1911] AC 730 ).9 Re Allardice; Allardice v Allardice (1910) 29 NZLR 959; 12 GLR 753 (affirmed Allardice v Allardice [1911] AC 730 ); Cooper v Dungan (1976) 9 ALR 93; 50 ALJR 539 .10 (ACT) Family Provision Act 1969 s 15(1) (NT) Family Provision Act 1970 s 15(1) (NSW) Succession Act 2006 s 65(2)(a), 65(2)(b), 65(2)(f) (QLD) Succession Act 1981 s 41(2)(b) (SA) Inheritance (Family Provision) Act 1972 s 7(6) (TAS) Testators Family Maintenance Act 1912 s 3(2)(a) (a lump sum payment only) (VIC) Administration and Probate Act 1958 s 96(3) (WA) Inheritance (Family and Dependants Provision) Act 1972 s 6(4). See also Worladge v Doddridge (1957) 97 CLR 1 at 18, 19; [1957] ALR 691 per Kitto J.

11 For example, the commencement date of payments may vary. See Re ONeill (1917) 34 WN (NSW) 72 at 73 per Simpson CJ; Borthwick v Perpetual Trustee Co Ltd (1958) SR (NSW) 151; 76 WN (NSW) 694 at 700 ; Srhoj v Marian [1965] WAR 61 at 64 per Hale J; In the Estate of Bridges (decd) (1975) 12 SASR 1 at 4-5 per Bray CJ (payment from date of instituting proceedings or from date order made); Re Liston (decd) [1957] VR 50 at 52-3 per Lowe J (payment to commence 15 months after order made).12 White v Barron (1980) 144 CLR 431 at 452; 30 ALR 51; 54 ALJR 333; BC8000077 per Aickin J; Goodman v Windeyer (1980) 144 CLR 490 at 503-4 per Gibbs J, at 511-12 per Aickin J; 31 ALR 23; 54 ALJR 470; BC8000095 .13 Re Shannon (1935) 35 SR (NSW) 516; 52 WN (NSW) 171 .14 (NSW) Succession Act 2006 s 65(2)(c).15 Ibid s 65(2)(d). See, for example, Pata v Vambuca [2002] NSWSC 167; BC200200799 (order for a legacy and life estate in house to nephew; executor directed to expend $240,000 to renovate the house).16 (NSW) Succession Act 2006 s 65(2)(f). There are no equivalent provisions in the other jurisdictions. 17 (TAS) Testators Family Maintenance Act 1912 s 3(2)(b), 3(2)(c), 3(3). There are no equivalent provisions in the other jurisdictions. 18 (WA) Trustees Act 1962 s 65.19 (WA) Inheritance (Family and Dependants Provision) Act 1972 s 8(1). There are no equivalent provisions in the other jurisdictions.

20 (ACT) Family Provision Act 1969 s 11 (NT) Family Provision Act 1970 s 11 (NSW) Succession Act 2006 s 65(1)(d) (QLD) Succession Act 1981 s 41(2)(a) (SA) Inheritance (Family Provision) Act 1972 s 7(4) (TAS) Testators Family Maintenance Act 1912 s 9(1)(d) (VIC) Administration and Probate Act 1958 s 96(2) (WA) Inheritance (Family and Dependants Provision) Act 1972 s 6(3). See, for example, Re Fletcher (decd); Fletcher v Usher [1921] NZLR 649; [1921] GLR 429 (abstention from the consumption of intoxicating liquor); Re Green (decd) (1911) 13 GLR 477 (condition that applicant obtain medical treatment). 21 In the Estate of Leahy (decd); Earl v Moses [1975] 1 NSWLR 246 at 251 per Bowen CJ.22 McGrath v Queensland Trustees Ltd [1919] St R Qd 169; [1919] QWN 34 (waiving rights against spouses estate); Re Wright [1966] Tas SR (NC 1) 287 (surrendering part of a superannuation payment to the estate).23 (ACT) Family Provision Act 1969 s 14 (NT) Family Provision Act 1970 s 14 (NSW) Succession Act 2006 s 67. There are no equivalent provisions in the other jurisdictions. 24 (TAS) Testators Family Maintenance Act 1912 s 8(2) (VIC) Administration and Probate Act 1958 s 96(2). There are no equivalent provisions in the other jurisdictions. The paragraph below is current to 16 May 2012 For new cases see ACL Reporter To update legislation see ACL Legislation [395-6880] Spouses The particular issues that have arisen in relation to the making of orders in favour of spouses include: (1) whether or not a claimant has been a dutiful and devoted spouse;1 (2) whether or not a spouse can provide for himself or herself financially;2 and (3) the length and character of the relationship between the applicant and the deceased.3 The court will look at the level of provision necessary for the surviving spouse to achieve

independence,4 which includes:5 (1) security in the spouses home;6 (2) income sufficient to permit the spouse to live in the style to which he or she is accustomed;7 and (3) a fund to enable the spouse to meet any unforeseen contingencies.8 Notes 1 Goodman v Windeyer (1980) 144 CLR 490; 31 ALR 23; 54 ALJR 470; BC8000095 .2 Parsons v Lake [2001] NSWSC 572; BC200103678 .3 Ellis v Ellis [2001] NSWSC 289; BC200102001 ; Carruthers v Marshall [2001] NSWSC 665; BC200105196 ; Marshall v Carruthers [2002] NSWCA 47; BC200200589 .4 Langtry v Campbell (unreported, SC(NSW), Powell J, No 3252/88, 7 March 1991, BC9102264).5 Luciano v Rosenblum (1985) 2 NSWLR 65 at 69-70 per Powell J; Worladge v Doddridge (1957) 97 CLR 1 at 12; [1957] ALR 691 per Williams and Fullagar JJ; Re Harris [1936] SASR 497 at 501 per Cleland J.6 Ng v Taylor (unreported, SC(NSW), Powell J, No 2426/86, 13 June 1989, BC8902070) (de facto wife); Langtry v Campbell (unreported, SC(NSW), Powell J, No 3252/88, 7 March 1991, BC9102264); White v Barron (1980) 144 CLR 431; 30 ALR 51; 54 ALJR 333; BC8000077 ; Luciano v Rosenblum (1985) 2 NSWLR 65 ; Murray v Parsons (unreported, SC(NSW), McClelland J, No 4145/86, 3 March 1989, BC8902463). In making a flexible order the court must take into account both retirement village and nursing home accommodation: Court v Hunt (unreported, SC(NSW), Young J, No 1996/87, 14 September 1987, BC8701155).7 Protecting an income from the effects of inflation has been achieved either by indexing the annuity or providing a lump sum, the choice falling within the discretion of the court: White v Barron (1980) 144 CLR 431; 30 ALR 51; 54 ALJR 333; BC8000077 ; Goodman v Windeyer (1980) 144 CLR 490; 31 ALR 23; 54 ALJR 470; BC8000095 ; Re Saxon (decd); Saxon v Elders Trustee and Executor Co Ltd (1975) 12 SASR 110 . Income provisions are no longer necessarily tied to widowhood: White v Barron (1980) 144 CLR 431 at 444; 30 ALR 51; 54 ALJR 333; BC8000077 per Mason J. See also (TAS) Testators Family Maintenance Act 1912 s 9(4). A lump sum may be preferred to an income provision due to the delay on the distribution of the estate: Re Anderson (1975) 11 SASR 276 at 285 per Zelling J. An income provision may be appropriate in the case of an elderly person or a spouse of uncertain life expectancy: Re Traeger (decd) [1949] SASR 180 at 187 per Mayo J. 8 In considering whether to include such provision, and if so, the size of such provision, the court may only go so far as to remedy the lack of proper provision in the will: White v Barron (1980) 144 CLR 431 at 458; 30 ALR 51; 54 ALJR 333; BC8000077 per Wilson J. The age of the spouse is relevant: Pengilley v Public Trustee (unreported, SC(NSW), Young J, No 3824/84, 9 October 1985, BC8500486). The claims of children are also significant: Worladge v Doddridge (1957) 97 CLR 1; [1957] ALR 691 ; White v Barron (1980) 144 CLR 431; 30 ALR 51; 54 ALJR 333; BC8000077 . The paragraph below is current to 16 May 2012 For new cases see ACL Reporter [395-6885] Children The court is not at liberty to provide for an equal division amongst the

children of the deceased, unless this is the conclusion reached as a matter of discretion in all the circumstances of the case.1 In making orders for minors, the court must take into account a wide range of contingencies.2 Where the estate is large, a wider range of needs and contingencies may be taken into account.3 Where an applicant has shown a propensity for being a spendthrift, but otherwise the court considers that there is jurisdiction to make an order in the applicants favour, the court may take this into account in the manner of framing an order.4 Notes 1 Re Hodgson (decd) [1955] VLR 481 at 485; [1956] ALR 108 per Herring CJ, SC(VIC), Full Court; Blore v Lang (1960) 104 CLR 124 at 134-6 per Fullagar and Menzies JJ; Re Clift [1963] NSWR 1313 at 1322-3 per Richardson J; Re Taylor [1968] Qd R 385 at 392 per Lucas J; Cooper v Dungan (1976) 9 ALR 93; 50 ALJR 539 at 540 per Gibbs J, at 542 per Stephen J; Gorton v Parks (1989) 17 NSWLR 1 at 6 per Bryson J; Re Liston (decd) [1957] VR 50 at 52 per Lowe J.2 Bosch v Perpetual Trustee Co Ltd (1938) 38 SR (NSW) 176; [1938] AC 463 at 478, 483; [1938] 2 All ER 14 , PC; Re Butler [1948] VLR 434; [1948] 2 ALR 593 .3 Bosch v Perpetual Trustee Co Ltd (1938) 38 SR (NSW) 176; [1938] AC 463; [1938] 2 All ER 14 ; Blore v Lang (1960) 104 CLR 124 at 135 per Fullagar and Menzies JJ; Gorton v Parks (1989) 17 NSWLR 1 at 8-9 per Bryson J; Coates v National Trustees Executors and Agency Co Ltd (1956) 95 CLR 494; [1956] ALR 739; (1956) 30 ALJ 231 ; Wentworth v Wentworth (unreported, SC(NSW), Bryson J, No 3748/89, 14 June 1991, BC9101896) (reversed on another point Wentworth v Wentworth (unreported, CA(NSW), Samuels AP, Priestley and Handley JJA, No 40370/1991, 3 March 1992, BC9202033)).4 Kearns v Ellis (unreported, CA(NSW), Glass, Mahoney and McHugh JJA, CA363 of 1983, 5 December 1984, BC8400149); Bondy v Vavros (unreported, SC(NSW), Young J, No 3983/86, 29 August 1988, BC8802429). The paragraph below is current to 16 May 2012 For new cases see ACL Reporter [395-6890] Discretion and social security benefits Two issues arise in relation to social security benefits: (1) the relevance of social security entitlements to an applicants claim; and (2) the relevance of the provision of care by the state, for example, where an applicant is confined to an institution such as a mental hospital.1 The court may not make an order simply to relieve the state of payments that would otherwise be made.2 Entitlement to pensions or other social security payments is to be taken into account but should not be regarded as a substitute for the obligation of the deceased under the family provision legislation.3 The preservation of a pension entitlement may be significant in the exercise of the discretion to make an order in favour of an eligible applicant where the estate is small, for in such a case the assets of the estate might be preserved better for others who also have a claim on the bounty of the deceased.4 If the applicant does not directly receive any benefit and the only effect of an order for relief would be to enrich the States public revenue, then the order should not be made.5 However, in some cases provision has been allowed by the court for relief for the disabled applicant6 in order to meet contingencies such as being permanently or temporarily discharged from the hospital or institution or being allowed time away from it as well as provision for extra comforts, clothing and outings of a recreational nature.7 However, if the

disabled patient does not obtain any direct benefit whatsoever from a relief order, the order will be refused by the court.8 Notes 1 As to mental health services generally see mental health and intellectual disability [285-110].2 Lieberman v Morris (1944) 69 CLR 69; [1944] ALR 150; 18 ALJR 67; BC4400033 .3 Re Pope (decd); Pope v Public Trustee (1975) 11 SASR 571 at 574 per Bray CJ; Shah v Perpetual Trustee Co (1981) 7 Fam LR 97 at 100 per Rath J.4 Parker v Public Trustee (unreported, SC(NSW), Young J, No 4567/87, 31 May 1988, BC8801885); Shah v Perpetual Trustee Co (1981) 7 Fam LR 97 at 100 per Rath J; Bondelmonte v Blanckensee [1989] WAR 305 at 312 per Malcolm J, at 320-1 per Nicholson J; Triplett v Triplett (unreported, SC(WA), Ipp J, No 2359/87, 16 March 1990, BC9001437).5 Re Duff (1948) 48 SR (NSW) 510 at 512, 513; 65 WN (NSW) 282 per Sugerman J; Re E (decd); E v E [1966] 2 All ER 44 at 48; [1966] 1 WLR 709 per Stamp J.6 Re McNamara (decd) (1938) 55 WN (NSW) 180 ; Re Williams [1933] SASR 107 .7 Re WTN (1959) 33 ALJ 240n; Re Pringle (1956) CLY 9248; Penty v Mott (1984) 6 DLR (4th) 444; Re Wood [1982] LS Gaz R 774.8 Re Duff (1948) 48 SR (NSW) 510; 65 WN (NSW) 282 .

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(6) ORDERS

This chapter was updated by Bonnie Allan BA LLB(ANU), Grad Dip Legal Practice(ANU)

Casual Lecturer/Tutor, Australian National University

The paragraph below is current to 16 May 2012 For new cases see ACL Reporter To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-7090] General In all jurisdictions except New South Wales, the court has a wide power to make an order under the family provision legislation for such provision as it thinks fit.1 In New South Wales, the court has the power to make any such provision as ought to be made.2 In all jurisdictions, the family provision legislation expressly allows the court to make an order in the form of a lump sum, periodical payment or other payment.3 The court has a wide discretion in respect of the terms of an order for periodical payment.4 Such payments may be indexed,5 and automatically cease upon the death of the person benefiting from the payments.6 In New South Wales, the court may also make provision through: (1) specified existing or future property;7 (2) an absolute or limited interest in property;8 (3) setting aside property as a class fund for the benefit of more than one person;9 or (4) any other manner which the court thinks fit.10 In Tasmania, the court may make an order for provision by way of a life interest or lesser interest in a dwelling-house, including a house purchased by order of the court from assets of the estate.11 In Western Australia, the court may make an order for family provision under the (WA) Trustees Act 1962,12 rather than the (WA) Inheritance (Family and Dependants Provision) Act 1972, if the deceaseds estate has been wholly or partly distributed to beneficiaries.13 Notes 1 (ACT) Family Provision Act 1969 s 8(1) (NT) Family Provision Act 1970 s 8(1) (QLD) Succession Act 1981 s 41(1)

(SA) Inheritance (Family Provision) Act 1972 s 7(1) (TAS) Testators Family Maintenance Act 1912 s 3(1) (power to make an order as the court thinks proper) (VIC) Administration and Probate Act 1958 s 91 (WA) Inheritance (Family and Dependants Provision) Act 1972 s 6(1). The (WA) Inheritance (Family and Dependants Provision) Amendment Act 2011 was passed on 25 October 2011. The substantive provisions do not come into effect until the day set by proclamation, and no day had been set as of the time of publication. The amending Act renames the principal Act the (WA) Family Provision Act 1972. 2 (NSW) Succession Act 2006 s 59(2).3 (ACT) Family Provision Act 1969 s 15(2) (NT) Family Provision Act 1970 s 15(1) (NSW) Succession Act 2006 s 65(2)(a), 65(2)(b), 65(2)(f) (QLD) Succession Act 1981 s 41(2)(b) (SA) Inheritance (Family Provision) Act 1972 s 7(6) (TAS) Testators Family Maintenance Act 1912 s 3(2)(a) (lump sum payment only) (VIC) Administration and Probate Act 1958 s 96(3) (WA) Inheritance (Family and Dependants Provision) Act 1972 s 6(4). See also Worladge v Doddridge (1957) 97 CLR 1 at 18, 19; [1957] ALR 691 per Kitto J.

4 For example, the commencement date of payments may vary. See Re ONeill (1917) 34 WN (NSW) 72 at 73 per Simpson CJ; Borthwick v Perpetual Trustee Co Ltd (1958) SR (NSW) 151; 76 WN (NSW) 694 at 700 ; Srhoj v Marian [1965] WAR 61 at 64 per Hale J; In the Estate of Bridges (decd) (1975) 12 SASR 1 at 4-5 per Bray CJ (payment from date of instituting proceedings or from date order made); Re Liston (decd) [1957] VR 50 at 52-3 per Lowe J (payment to commence 15 months after order made).5 White v Barron (1980) 144 CLR 431 at 452; 30 ALR 51; 54 ALJR 333; BC8000077 per Aickin J; Goodman v Windeyer (1980) 144 CLR 490 at 503-4 per Gibbs J, 511-12 per Aickin J; 31 ALR 23; 54 ALJR 470; BC8000095 .6 Re Shannon (1935) 35 SR (NSW) 516; 52 WN (NSW) 171 .7 (NSW) Succession Act 2006 s 65(2)(c).8 Ibid s 65(2)(d). See, for example, Pata v Vambuca [2002] NSWSC 167; BC200200799 (order for a legacy and life estate in house to nephew; executor directed to expend $240,000 to renovate the house).9 (NSW) Succession Act 2006 s 65(2)(e).10 Ibid s 65(2)(f). There are no equivalent provisions in the other jurisdictions. 11 (TAS) Testators Family Maintenance Act 1912 s 3(2)(b), 3(2)(c), 3(3). There are no equivalent provisions in the other jurisdictions. 12 (WA) Trustees Act 1962 s 65.13 (WA) Inheritance (Family and Dependants Provision) Act 1972 s 8(1). There are no equivalent provisions in the other jurisdictions. The paragraph below is current to 16 May 2012 For new cases see ACL Reporter

To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-7095] Interim orders In all jurisdictions except New South Wales, interim orders1 for relief cannot be made by the court under the family provision legislation, as orders made pursuant to such legislation are usually final orders determining the applicants right to family provision.2 However, interim orders have been granted where: (1) there is a substantial asset in the estate of the deceased which has not been precisely valued;3 or (2) there is consent from all parties to the making of an interim order.4 In New South Wales, legislation expressly permits the making of interim orders by the court in specified circumstances.5 Such orders display the desire of the court to go as far as it can in providing for an applicant who is suffering hardship while the proceedings are on foot or to make provision while some outstanding factors come to the courts attention before a final order is made.6 Notes 1 Interim orders are not orders which make a complete and final provision for an applicant, but they allow the court to increase, decrease or vary the provision which has already been made to the applicant when the final application is determined: Re Piper (decd) and the Testators Family Maintenance and Guardianship of Infants Act, 1916-1954 (1960) SR (NSW) 328 at 329 per Myers J.2 Re Piper (decd) and the Testators Family Maintenance and Guardianship of Infants Act, 1916-1954 (1960) SR (NSW) 328 at 330 per Myers J (allowing extra time for applicant to determine assets value); Re Yates (1955) 72 WN (NSW) 497 ; Re Porteous (decd) [1949] VLR 383 at 387; [1950] ALR 89 , SC(VIC), Full Court; Re Breen (decd) [1933] VLR 455; [1933] ALR 500 . See also Re Butler [1948] VLR 434 at 435; [1948] 2 ALR 593 per Lowe J (court prefers to make final order). Compare Re Blakemore (decd) and the Testators Family Maintenance Act [1967] 1 NSWR 10 ; In the Will of Jolliffe [1929] St R Qd 189 at 197 per Henchman J; Re White [1965] NSWR 1035 at 1038 per McLelland CJ.3 Re Blakemore (decd) and the Testators Family Maintenance Act [1967] 1 NSWR 10 at 11 per McLelland CJ.4 Re Shelley (decd); Shelley v Public Trustee [1937] NZLR 342; [1937] GLR 200 , SC(NZ), Full Court.5 (NSW) Succession Act 2006 s 62 (the court must be of the opinion that the final order will be equal or greater than the provision made in the interim order). As to the classes of possible interim orders see Young v Salkeld (1985) 4 NSWLR 375 at 377 per Young J.6 Young v Salkeld (1985) 4 NSWLR 375 at 379 per Young J. The paragraph below is current to 16 May 2012 For new cases see ACL Reporter To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-7100] Interim maintenance In most jurisdictions, the personal representative1 may provide

interim maintenance to various classes of dependants of the deceased.2 In Queensland, Victoria and Western Australia, a distribution may be made where the potential applicant consents to it in writing.3 Notes 1 As to the personal representative see [395-7005], [395-7010].2 (ACT) Family Provision Act 1969 s 20(2) (includes education support) (NSW) Succession Act 2006 s 94 (to an eligible person, wholly or substantially dependent on the deceased, to provide what is immediately necessary for maintenance or education) (NT) Family Provision Act 1970 s 20(2) (includes education support) (QLD) Succession Act 1981 ss 44(1), 44(2) (maintenance and support to the spouse or children of the deceased only, not including education support), 49A (maintenance, support or education to a dependent beneficiary) (VIC) Administration and Probate Act 1958 s 99A(1) (maintenance and support to the spouse or children of the deceased only, not including education support) (WA) Inheritance (Family and Dependants Provision) Act 1972 s 11 (limits the support and maintenance to those things immediately necessary for the maintenance of dependants). The (WA) Inheritance (Family and Dependants Provision) Amendment Act 2011 was passed on 25 October 2011. The substantive provisions do not come into effect until the day set by proclamation, and no day had been set as of the time of publication. The amending Act renames the principal Act the (WA) Family Provision Act 1972. There are no equivalent provisions in the other jurisdictions. 3 (QLD) Succession Act 1981 s 44(2)(a) (VIC) Administration and Probate Act 1958 s 99A(2)(a) (WA) Inheritance (Family and Dependants Provision) Act 1972 s 20(4)(a). There are no equivalent provisions in the other jurisdictions. The paragraph below is current to 16 May 2012 For new cases see ACL Reporter To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-7105] Consent orders Consent orders1 are usually not granted as the courts jurisdiction is to decide whether it considers that adequate provision has been made for the applicant and not to approve an agreement for provision reached by the parties.2 However, where the parties submit a consent order to the court, the court must look into the facts and circumstances of the parties to ascertain whether the consent order is appropriate and fair in all circumstances.3 In New South Wales, the court is expressly empowered to make a family provision order in terms of a consent order if it is presented to the court following mediation or on the advice of a lawyer.4 Notes 1 As to consent orders generally see practice and procedure [325-6720]-[325-6735].2 Re

1 As to consent orders generally see practice and procedure [325-6720]-[325-6735].2 Re Archibald (decd) [1950] QWN 3 . Compare Re Pentland [1972] Tas SR (NC 27) 278.3 McMahon v McMahon (unreported, SC(NSW), Young J, 4328 of 1985, 2 August 1985, BC8500637).4 (NSW) Succession Act 2006 s 98. The paragraph below is current to 16 May 2012 For new cases see ACL Reporter To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-7110] Conditional orders In all jurisdictions, the family provision legislation allows the court to impose any conditions it thinks fit on an order.1 However, the conditions must not breach common law rules, unless legislation expressly provides otherwise.2 The court may require the applicant to waive his or her existing rights.3 In the Australian Capital Territory, the Northern Territory and New South Wales, a condition may be attached to an order made in relation to the estate of a person who is presumed to be dead that if the person is subsequently found to be alive, restitution or restoration of the property must be made by the applicant.4 In Tasmania and Victoria, the court may impose conditions to prevent, restrict or defeat an alienation of, or charge on, the benefit of any provision made under the order.5 Notes 1 (ACT) Family Provision Act 1969 s 11 (NT) Family Provision Act 1970 s 11 (NSW) Succession Act 2006 s 65(1)(d) (QLD) Succession Act 1981 s 41(2)(a) (SA) Inheritance (Family Provision) Act 1972 s 7(4) (TAS) Testators Family Maintenance Act 1912 s 9(1)(d) (VIC) Administration and Probate Act 1958 s 96(2) (WA) Inheritance (Family and Dependants Provision) Act 1972 s 6(3). The Inheritance (Family and Dependants Provision) Amendment Act 2011 was passed on 25 October 2011. The substantive provisions do not come into effect until the day set by proclamation, and no day had been set as of the time of publication. The amending Act renames the principal Act the Family Provision Act 1972. See, for example, Re Fletcher (decd); Fletcher v Usher [1921] NZLR 649; [1921] GLR 429 (abstention from the consumption of intoxicating liquor); Re Green (decd) (1911) 13 GLR 477 (condition that applicant obtain medical treatment). 2 In the Estate of Leahy (decd); Earl v Moses [1975] 1 NSWLR 246 at 251 per Bowen CJ.3 McGrath v Queensland Trustees Ltd [1919] St R Qd 169; [1919] QWN 34 (waiving rights against spouses estate); Re Wright [1966] Tas SR (NC 1) 287 (surrendering part of a superannuation payment to the estate).4 (ACT) Family Provision Act 1969 s 14 (NT) Family Provision Act 1970 s 14

(NSW) Succession Act 2006 s 67 There are no equivalent provisions in the other jurisdictions. 5 (TAS) Testators Family Maintenance Act 1912 s 8(2) (VIC) Administration and Probate Act 1958 s 96(2). There are no equivalent provisions in the other jurisdictions. The paragraph below is current to 16 May 2012 For new cases see ACL Reporter To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-7115] Burden of orders In all jurisdictions except New South Wales, the burden of an order for family provision legislation falls on either the estate or the persons entitled to the estate in proportion to the value of their respective shares, unless the court otherwise indicates.1 In appropriate circumstances, the court may excuse or exonerate any persons share of the estate from the burden of a family provision order.2 In New South Wales, the burden of the order is to be determined at the discretion of the court,3 which usually means that it will fall upon the residue, or if insufficient, upon legacies rateably.4 Unless the court otherwise directs, an order for provision takes effect as if the provision was made by a codicil to the will or, where the deceased person died intestate, in the will of the deceased person.5 The burden of an order for family provision may be carried by the major beneficiary of the will who receives the bulk of the estate6 or it may fall upon a smaller beneficiary of the estate, 7 especially when this smaller beneficiary is a charity or a stranger who has enjoyed a close relationship with the testator and the beneficiary of the larger share of the estate is a widow or a widower.8 The court may consider gifts bestowed upon a beneficiary during the lifetime of the deceased when deciding the incidence of the order.9 The court has a discretion to order that the burden of relief fall upon those beneficiaries who have not yet had their shares distributed.10 Notes 1 (ACT) Family Provision Act 1969 s 11(2) (NT) Family Provision Act 1970 s 11(2) (QLD) Succession Act 1981 s 41(3) (SA) Inheritance (Family Provision) Act 1972 s 9(2) (TAS) Testators Family Maintenance Act 1912 s 10A(1) (VIC) Administration and Probate Act 1958 s 97(2) (WA) Inheritance (Family and Dependants Provision) Act 1972 s 14(2). The (WA) Inheritance (Family and Dependants Provision) Amendment Act 2011 was passed on 25 October 2011. The substantive provisions do not come into effect until the day set by proclamation, and no day had

been set as of the time of publication. The amending Act renames the principal Act the (WA) Family Provision Act 1972. There are no equivalent provisions in New South Wales. 2 (ACT) Family Provision Act 1969 s 11(2) (NT) Family Provision Act 1970 s 11(2) (NSW) Succession Act 2006 s 68 (QLD) Succession Act 1981 s 41(3) (SA) Inheritance (Family Provision) Act 1972 s 9(2) (TAS) Testators Family Maintenance Act 1912 s 10A(2) (VIC) Administration and Probate Act 1958 s 97(2) (WA) Inheritance (Family and Dependants Provision) Act 1972 s 14(2). 3 (NSW) Succession Act 2006 s 65(1)(c).4 See, for example, Ahearn v Ahearn [1917] St R Qd 167; [1917] QWN 24 . If the value of the estate decreases, the applicants benefit may abate: Re Jennery (decd); Jennery v Jennery [1967] Ch 280; [1967] 1 All ER 691; [1967] 2 WLR 201 . Compare Union-Fidelity Trustee Co of Australia Ltd v Montgomery [1976] 1 NSWLR 134 (annuity awarded to applicant widow took priority over other legacies and did not abate).5 (NSW) Succession Act 2006 s 72.6 Shah v Perpetual Trustee Co (1981) 7 Fam LR 97 , SC(NSW); Re Theaker (decd) [1955] QWN 51 ; Re Norris [1953] Tas SR 32 ; Re Else; Trustees Executors and Agency Co Ltd v Else [1948] VLR 468; [1948] 1 ALR 133 ; Re Hood; Hood v Hood [1942] VLR 144; [1942] ALR 244 ; Dillon v Public Trustee of New Zealand [1941] AC 294 at 306, 307; [1941] 2 All ER 284; (1941) 165 LT 357 per Simon LC, PC; Re McNamara (decd) (1938) 55 WN (NSW) 180 ; In the Will of Jolliffe [1929] St R Qd 189 ; Ahearn v Ahearn [1917] St R Qd 167; [1917] QWN 24 .7 Re Johnston [1947] QWN 29 .8 Re Seery and the Testators Family Maintenance Act [1969] 2 NSWR 290; (1969) 90 WN (Pt 1) (NSW) 400 (reversed on another point Schaefer v Schuhmann [1972] AC 572; [1972-73] ALR 501; (1972) 46 ALJR 82; [1972] 1 All ER 621 , PC).9 Re Paulin [1950] VLR 462; [1950] ALR 503 .10 In the Will of OConnor [1931] QWN 39 . The paragraph below is current to 16 May 2012 For new cases see ACL Reporter To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-7120] Variation of orders In all jurisdictions, family provision legislation empowers the court to discharge, vary or suspend an order or make such other order as the court thinks fit.1 However, in the Northern Territory, the court does not have the power to increase provision.2 Also legislation which only includes a power to vary an order has been held not to extend to an order for increased provision.3 An increase in provision is expressly permitted in the Australian Capital Territory, New South Wales, Queensland, Tasmania and Western Australia.4 The power to vary an order must be exercised cautiously5 and an increase or reduction in the amount of the provision must only be made where this is clearly called for by the altered circumstances of the case.6 The main reason why the courts vary an order is that there have been substantial changes in the

circumstances of the person who is affected by the family provision order or substantial changes to the deceased estate.7 In all jurisdictions except New South Wales, the court may not develop an entirely new order.8 The power to vary an order must be exercised cautiously, and it does not enable a court to review the dismissal of an application for relief.9 In New South Wales, the court may make a new order for an applicant whose application for family provision has been refused in the past.10 This may occur only if at the time of refusal there was undisclosed property in the estate, that would have increased the estate of the deceased person substantially and the court would not have refused the application at that time.11 Notes 1 (ACT) Family Provision Act 1969 s 9A(1)-(3). An administrator or any person beneficially entitled to, or interested in, any part may apply: ibid s 9A(2). (NT) Family Provision Act 1970 s 17. An administrator or any person beneficially entitled to, or interested in, any part may apply: ibid s 17(1), 17(2). Notice of an application for variation must be served on all persons who have taken a benefit under the order: ibid s 17(4). (NSW) Succession Act 2006 s 70(1). The court may revoke or alter an order for provision to be made in respect of the same property for the benefit of another eligible person: ibid ss 70, 71. The court must not alter or revoke an order for provision in favour of an eligible person to allow the making of a further order for provision in favour of another eligible person, unless the other eligible person shows sufficient cause for not having applied for provision in his or her favour before the first mentioned order was made: ibid s 70(3). The court may make an order for additional provision (to an eligible person who has already been granted provision) out of the deceaseds estate or notional estate where the eligible person shows that there has been a substantial detrimental change in his or her circumstances since the order was made: ibid s 59(3)(a). The court may also make an order for additional provision where there was undisclosed property at the time of the previous order, which would have made the estate substantially greater in value: ibid s 59(3)(b), 59(4). For matters to which the court may have regard in making such a determination see ibid s 60. See also Re De Kantzow (decd) and the Testators Family Maintenance Act [1968] 3 NSWR 217; (1968) 88 WN (Pt 1) (NSW) 437 per Street J. (QLD) Succession Act 1981 s 42. Where the court has ordered a periodic payment or has ordered any part of the estate or lump sum to be invested for the benefit of a person, the court may increase or reduce the provision; discharge, vary or suspend the order; or make such other orders as are just in the circumstances: ibid s 42(1). The court may alter an order upon the application of any person and enquire whether any party deriving benefit from the order is still living or whether the provision remains adequate: ibid s 42(1). The court must not increase the provision unless either the income from the estate or the invested capital is sufficient to meet the proposed increase in the provision and all other lawful payments: ibid s 42(1), 42(2). (SA) Inheritance (Family Provision) Act 1972 ss 9(5), 12. On the application of the administrator or any person beneficially entitled, the court has a general power and may rescind or alter any order: ibid s 9(5). Where the court has ordered periodic payments or a lump sum to be invested for the benefit of any person and that persons financial situation has improved, the court may discharge, vary or suspend periodical payments or make such other orders as are just in the circumstances: ibid s 12. (TAS) Testators Family Maintenance Act 1912 s 9(5). Upon the application of the executor, administrator or entitled or interested person, the court may rescind or alter any order by increasing or reducing the amount of any provision (including periodic payments or benefit from lump sum investment) or by varying any order as the court thinks fit: ibid s 9(5). Notice of an application to rescind or alter an order must be served on any persons taking any benefit from the existing order: ibid s 9(6).

existing order: ibid s 9(6). (VIC) Administration and Probate Act 1958 s 97(5). On application of the executor, administrator or any person beneficially interested in the deceaseds estate, the court may rescind or alter any order. A notice of motion must be served on all persons taking any benefit from the existing order: ibid s 97(5). See also Re Bishop (decd) [1953] VLR 543 at 548; [1952] ALR 1022 per Herring CJ (rescission of an order is a complete cancellation). (WA) Inheritance (Family and Dependants Provision) Act 1972 s 15. The Act is to be renamed: see further note 4 below. On application of the executor, administrator or any person beneficially interested in the deceaseds estate, the court may rescind or suspend any order or reduce or increase provision made under it: ibid ss 15(1), 16(1). In reducing the order, the court must have regard to any hardship that would be caused to any person taking under the existing provision: ibid s 15(1). The court may increase the provision only where it would not be inequitable to grant relief, having regard to all possible implications in respect of other persons, and where the applicant demonstrates that since the date of the existing order circumstances have so changed that undue hardship would be caused if the increase is not granted: ibid s 16. An application for increase may only be brought by a person who was granted provision when the original grant was ordered: ibid s 16(1). Notice of an application to rescind, suspend or reduce provision must be served on all persons taking benefit under the existing order: ibid s 15(2). Notice of any application to increase the provision must be served on the administrator of the estate or other persons as the court directs: ibid s 16(2). 2 (NT) Family Provision Act 1970 s 17(3).3 Preston v Public Trustee [1933] GLR 868; [1933] NZLR 1237 ; Re Edwards [1960] Tas SR 146 .4 (ACT) Family Provision Act 1969 s 9A(3) (where the court has directed provision by way of periodical payments or the benefit of the investment of a lump sum) (NSW) Succession Act 2006 s 59(3) (power to make an order for additional provision where there has been a substantial detrimental change in the circumstances of the eligible person, or undisclosed property. The power conferred by (NSW) Family Provision Act 1982 (repealed) s 8 (now replaced by (NSW) Succession Act 2006 s 59(3)) to increase a former provision was held to only apply when the former order was for continuing maintenance and the income was inadequate to provide for the maintenance, education or advancement in life of the eligible person: Wentworth v Wentworth (1995) 37 NSWLR 703; BC9505254 . (QLD) Succession Act 1981 s 42(1) (general power to vary; however, power to award increased provision is confined to cases where the initial order was a periodical payment or investment of a lump sum) (TAS) Testators Family Maintenance Act 1912 s 9(5)(b) (court may increase an order in such manner as it thinks proper provided that it will not disturb a distribution of any part of the estate that was lawfully made before the making of the application for the alteration). See also ibid s 9(5A) (WA) Inheritance (Family and Dependants Provision) Act 1972 s 16(1) (since original order circumstances have so changed that undue hardship will be caused if increased provision is not made). The (WA) Inheritance (Family and Dependants Provision) Amendment Act 2011 was passed on 25 October 2011. The substantive provisions do not come into effect until the day set by proclamation, and a day had not been set as of the time of publication. The amending Act, which renames the principal Act the (WA) Family Provision Act 1972, amends ibid s 6, allowing the court to make a further family provision order when an order has already been made if there is undisclosed property and if the value of that undisclosed property would have materially affected the orders made by the court. 5 Re Edwards [1960] Tas SR 146 at 147 per Gibson J .6 Wentworth v Wentworth (1995) 37 NSWLR 703; BC9505254 at [32] per Powell JA.7 Re Edwards [1960] Tas SR 146 at 147 per Gibson J .8 Re Edgar [1962] Tas SR 145 at 147 per Gibson J ; Re Porteous (decd) [1949]

VLR 383 at 385; [1950] ALR 89 per Herring CJ , SC(VIC), Full Court.9 Leeder v Ellis (1952) 86 CLR 64 at 65; [1952] ALR 1198; (1953) 26 ALJR 482; BC5200270 per Lord Cohen, PC . As to the persons eligible to apply for relief see [395-6555]-[395-6600]. As to jurisdiction to make an order see [395-6675]-[395-6755]. 10 (NSW) Succession Act 2006 s 59(4). Note that the (WA) Inheritance (Family and Dependants Provision) Amendment Act 2011, the substantive provisions of which had not yet come into force at the time of publication, renames the principal Act the (WA) Family Provision Act 1972 and amends ibid s 6, allowing the court to make a family provision order when an application for an order has already been refused if there is undisclosed property the value of which would have materially affected the orders made by the court.11 (NSW) Succession Act 2006 s 59(3)(b), 59(4). The paragraph below is current to 16 May 2012 For new cases see ACL Reporter To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-7130] Settlement considerations In all jurisdictions except Queensland, the family provision legislation provides that any settlement agreement operates either as a codicil to the will, or, if the deceased was intestate, as an amendment to the intestacy rules or as if it had been made in the will of the deceased person.1 There is no duty payable on instruments executed in accordance with a court order such as a settlement agreement.2 A settlement agreement executed in the form of a deed 3 is liable to duty at ad valorem rates.4 If the deed amounts to a resettlement of the entire estate, ad valorem duty is to be paid on the gross value of the estate.5 The court must be satisfied that the settlement is appropriate.6 The courts sanction is necessary to any agreement, even if a next friend is appointed as security for the applicants rights.7 Notes 1 As to the effect of the order see [395-6930]. As to intestacy generally see [395-1500]-[3952095]. Prior to any settlement agreement being entered into, an applicant should ensure any such agreement is based on a current valuation of the estate. As to valuation of the estate see [3954000]-[395-6035]. Factors such as the disability of one of the parties and any relevant tax implications, as well as conveyancing or transfer costs, should be taken into account when entering into a settlement agreement. As to tax implications of family provision see [395-7135].2 Brown v Brown (1921) 22 SR (NSW) 106 at 110; 38 WN (NSW) 255 per Street CJ; Atkinson v Collector of Imposts [1919] VLR 105 . See also (NSW) Succession Act 2006 s 66(3) (instrument relating to property in notional estate of deceased person is not liable to duty under the (NSW) Duties Act 1997). 3 Davies v Collector of Imposts [1908] VLR 272; (1908) 14 ALR 149 . As to deeds generally see deeds and other instruments [140-1].4 Ad valorem literally means according to the value: see Encyclopaedic Australian Legal Dictionary.5 Scott v Comptroller of Stamps [1967] VR 122 .6 Re Hatte [1943] St R Qd 1 at 26 per Philp J (court did not approve settlement agreement where applicant entered into agreement without the knowledge or assistance of solicitor).7 Katundi v Hay [1940] St R Qd 39 at 42 per Philp J; Glassford v Murphy (1878) 4 VLR (L) 123 .

The paragraph below is current to 16 May 2012 For new cases see ACL Reporter To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [395-7135] Tax implications Federal and State taxes and duties may be payable upon the transmission, conveyance or disposal of assets.1 Notes 1 In particular, capital gains tax. See generally (CTH) Income Tax Assessment Act 1997 Pt 33 Div 128 and specifically ibid ss 12815, 12825. See also taxation and revenue [405-7001][405-7650]. As to relevant State duties see taxation and revenue [405-36000]-[405-39575].

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(III) Certainty of Subject Matter The paragraph below is current to 20 April 2012

[430-260] Property the subject of a trust A trust can only exist where there is property which is certain1 to which the trust can relate, and which is property capable of being held by the trustee.2 There cannot be a presently existing trust of future property.3 Nor can a bank account in overdraft be trust property.4 As a general rule, any present property, real or personal, tangible or intangible, legal or equitable, which is capable of being transferred or assigned to a trustee at law or in equity may be the subject of a trust.5 Hence, the subject matter of a trust can constitute a beneficial interest in property, meaning that a trust may be created where the beneficial interest is held by a person in trust for other objects (termed a sub-trust), in which case the beneficial interest passes to the sub-trustee so that it can be held by the sub-trustee for the benefit of the ultimate beneficiaries.6 Exceptions to the general rule are where property is inalienable by nature, usually because it is intrinsically personal,7 or is made inalienable as a matter of public policy8 or by statute, or where in the case of land outside the jurisdiction the trust would not be recognised by the lex loci situs.9

An interest that is vested is still assignable, and capable of being the subject of a trust, even though enjoyment of that interest depends upon a future contingency.10

Trust property has been held to include the right to the income from shares,11 debts,12 an interest in a lottery ticket,13 a fishing licence,14 a milk quota,15 a share in a partnership,16 a chose in action of beneficiaries in respect of an unadministered estate,17 a chose in action in the form of the benefit of a contractual promise,18 the benefit of a guarantee (but probably not the benefit of an estoppel)19 and the goodwill of a business.20

Notes 1 See [430-265]. 2 Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614 at 621-2; [1937] VLR 15; [1936] ALR 198. 3 See [430-270]. 4 Fortex Group Ltd (in rec and liq) v MacIntosh [1998] 3 NZLR 171 at 174-5 per Gault, Keith and Tipping JJ, CA(NZ); Williams v Peters [2010] 1 Qd R 475; (2009) 72 ACSR 365; 232 FLR 98; [2009] QCA 180; BC200905394 at [5] per McMurdo P, at [31]-[44] per Muir JA. 5 Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614 at 621; [1937] VLR 15; [1936] ALR 198; Lord Strathcona Steamship Co Ltd v Dominion Coal Co Ltd [1926] AC 108 at 124; [1925] All ER Rep 87 at 95 per Lord Shaw; Don King Productions Inc v Warren [1998] 2 All ER 608 at 630. See also Caraher v Lloyd (Official Assignee) (1905) 2 CLR 480; 11 ALR 400; Specialised Transport Pty Ltd v Dominiak (1989) 16 NSWLR 657 (contract containing clause forbidding assignment). 6 Chief Commissioner of Stamp Duties v ISPT Pty Ltd (1998) 45 NSWLR 639; 9 BPR 16,735; BC9807013 per Mason P. Provided that the sub-trustee is not a bare trustee (see [430-3115]), there remain two trusts: Chief Commissioner of Stamp Duties v ISPT Pty Ltd (1998) 45 NSWLR 639; 9 BPR 16,735; BC9807013 per Mason P. 7 Re Dunsanys Settlement; Nott v Dunsany [1906] 1 Ch 578 (estate tail); Tasmanian Seafoods Pty Ltd v MacQueen [2005] TASSC 36; BC200502945 at [32]-[44] per Underwood CJ, Full Court (fishing quota units found to be inalienable under a contract and so not capable of being trust

property). Compare Hendry v EF Hendry Pty Ltd (2003) 227 LSJS 486; [2003] SASC 157; BC200302998 at [34]-[45] per Burley J (fishing licence held to be alienable and thus capable of being trust property). As to the non-assignability of the benefit of a contract involving personal skill or confidence where the identity of the person to whom the obligation is owed could make a material difference to the person owing the obligation see Tolhurst v Associated Portland Cement Manufacturers (1900) Ltd [1902] 2 KB 660 at 668 per Collins MR, CA (as to the principle, but decision to the contrary, on the facts); Kemp v Baerselman [1906] 2 KB 604; (1906) 75 LJKB 873, CA; Bruce v Tyley (1916) 21 CLR 277; 22 ALR 215; Moore v Collins [1937] SASR 195; Peters v General Accident and Life Assurance Corp Ltd [1937] 4 All ER 628; Nokes v Doncaster Amalgamated Collieries Ltd [1940] AC 1014; [1940] 3 All ER 549. As to the express terms, rather than merely the nature of a contract, making the benefit of it personal to the relevant party see Wilson v Cmr of Probate Duties (Vic) (1978) 8 ATR 799. 8 For example, an equitable right to set aside a deed for fraud or undue influence: Prosser v Edmonds (1835) 1 Y & C Ex 481; 160 ER 196. As to entitlement to salaries or pensions payable to enable persons to perform or to be available when required to perform public services see Davis v Duke of Marlborough (1818) 1 Swan 74; 36 ER 303. Compare Grenfell v Dean and Canons of Windsor (1840) 2 Beav 544; 48 ER 1292. As to equitable rights generally see equity. 9 Martin v Martin (1831) 2 Russ & My 507; 39 ER 487; Earl Nelson v Lord Bridport (1846) 8 Beav 547; 50 ER 215; Re Pearses Settlement; Pearse v Pearse [1909] 1 Ch 304; (1908) 100 LT 48. 10 Peter v Shipway (1908) 7 CLR 232; 15 ALR 214; [1908] HCA 52; Buhlmann v Nilson (1921) 29 CLR 417 at 421-2; 27 ALR 318 at 321 per Knox CJ; Public Curator of Queensland v Union Trustee Co of Australia Ltd (1922) 31 CLR 66 at 74-5; 28 ALR 438 at 441 per Higgins J; Re Rallis Will Trusts; Re Rallis Marriage Settlement; Calvocoressi v Rodocanachi [1964] Ch 288; [1963] 3 All ER 940; Re Midletons Will Trusts; Whitehead v Earl Midleton [1969] 1 Ch 600 at 607; [1967] 2 All ER 834 at 837 per Stamp J. 11 Tunley v FCT (1927) 39 CLR 528 (trustee held the shares upon trust for the life of the donor to give effect to the gift of the income from there). 12 R v Brown (1912) 14 CLR 17; 18 ALR 111 (a debt owing by the Crown). See also Re Trust of Smyth [1970] ALR 919. 13 Van Rassel v Kroon (1953) 87 CLR 298; [1953] ALR 190; (1953) 27 ALJ 75. 14 Pennington v McGovern (1987) 45 SASR 27, SC(SA), Full Court; Hendry v EF Hendry Pty Ltd (2003) 227 LSJS 486; [2003] SASC 157; BC200302998 at [34]-[45] per Burley J. Compare Tasmanian Seafoods Pty Ltd v MacQueen [2005] TASSC 36; BC200502945 at [32]-[44] per Underwood CJ (fishing quota units found to be inalienable under a contract and so not capable of being trust property). 15 Swift v Dairywise Farms Ltd [2000] 1 All ER 320. 16 Federal Commissioner of Taxation v Everett (1980) 143 CLR 440; 28 ALR 179. 17 Comptroller of Stamps (Vic) v Howard-Smith (1936) 54 CLR 614; [1937] VLR 15; [1936] ALR 198. 18 See [430-45]. 19 Eslea Holdings Ltd (formerly IPEC Holdings Ltd) v Butts (1986) 6 NSWLR 175, CA(NSW). 20 JW Broomhead (Vic) Pty Ltd (in liq) v JW Broomhead Pty Ltd [1985] VR 891; (1985) 9 ACLR 593. The paragraph below is current to 20 April 2012

[430-265] Certainty as to subject matter and its division between beneficiaries For a valid trust to be created, the property to be affected by the trust must be either expressly designated1 or so defined as to be capable of being ascertained.2 The certainty must exist when the trust is created, not merely at a future time when the deferred operation of the trust begins.3 A proportion of a quantity of identical items, or of an undivided mass of a commodity, not appropriated or identified as a discrete parcel, may lack sufficient certainty to be the subject of a trust,4 although the position in relation to a part of the settlors holding of shares in a specified company may be different.5 Where a gift is in such terms as to be capable of being a gift to the donee absolutely, so that either expressly or by implication the donee is permitted to use up or dispose of the property given, a gift over on the death of the donee of the residue or whatever remains of the property given will usually be void and the primary donee will take an absolute interest.6 The result has sometimes been arrived at on the basis that the gift over does not sufficiently identify the property to which it applies and is void for uncertainty,7 and other times on the basis that the primary gift is not qualified or cut down in any way by the gift over, which is therefore repugnant to or inconsistent with it.8 In some cases the combined grounds of uncertainty and repugnancy have been relied on.9 Because of the presence of a gift over, some gifts have been interpreted as conferring only a life interest on the primary donee,10 so that the gift over will not be void for uncertainty or repugnancy. This is more likely to be the result where there is no express authority conferred on the primary donee to use up or dispose of the property given except in paying debts and testamentary expenses, and the residue can be interpreted as referring to what remains after those payments rather than to what remains at the death of the primary donee.11 Another possible basis for finding that a gift over of whatever remains is not void is that the primary donee takes a life interest coupled with a general power of appointment over the property given or perhaps a more restricted power to use up or dispose of part of the property.12

Where the primary donee dies before the testator, a gift over of whatever remains, which would otherwise have been void for uncertainty, will be valid because the subject matter of the gift over will then be the whole of the subject matter of the primary gift.13

A bequest to X to which is attached a direction or stipulation that whatever remains at Xs death of the property given is to be passed on in his or her will to Y will usually be treated as an absolute gift to X.14 However, where X has agreed with the testator to carry out his intention under a secret trust15 or by way of mutual wills,16 it may be that on Xs death a trust will attach to whatever property of the testator X then has.17 In such a case X would, during his lifetime, be under a fiduciary obligation not to dispose of the testators property with wilful intent to prevent Y receiving the property.18

Where a fund is given as one part for an invalid object and as to the remainder for a valid object,19 the possibilities are:

(1) if the amount applicable to the invalid object is not ascertainable, the whole gift is void;20 or (2)

if the amount applicable to the invalid object is ascertainable, either (a) the valid gift applies to the balance remaining after deducting the amount applicable to the invalid gift,21 or (b) in cases where the invalid gift was to be applied in erecting or maintaining a family monument or tomb, or for some similar object, the valid gift applies to the whole fund.22

Where trustees are required by a will to hold several distinct items of property on trust, for A as to those items which he or she chooses, and for B as to the rest, and A has predeceased the testator, it is not possible at the testators death to identify the items to be held for B and the trust is void for uncertainty.23

Notes 1 Sprange v Barnard (1789) 2 Bro CC 585 at 587, 588; 29 ER 320 at 322; Eade v Eade (1820) 5 Madd 118; 56 ER 840; Curtis v Rippon (1820) 5 Madd 434; 56 ER 961; Sale v Moore (1827) 1 Sim 534; 57 ER 678; Hoy v Master (1834) 6 Sim 568; 58 ER 706; Bardswell v Bardswell (1838) 9 Sim 319; 59 ER 381; Pope v Pope (1839) 10 Sim 1; 59 ER 512; Knight v Knight (1840) 3 Beav 148; 9 LJ Ch 354; 49 ER 58 (affirmed sub nom Knight v Boughton (1844) 11 Cl & Fin 513; 8 ER 1195, HL); Cowman v Harrison (1852) 10 Hare 234; 68 ER 913; Green v Marsden (1853) 1 Drew 646; 61 ER 598; Palmer v Simmonds (1854) 2 Drew 221; 61 ER 704; Federal Commissioner of Taxation v Clarke (1927) 40 CLR 246 at 282-4 per Higgins J; Re Ferguson; Froomes v Ferguson [1957] VR 635; [1958] ALR 242; Re London Wine Co (Shippers) Ltd [1986] PCC 121; Perpetual Trustees WA Ltd v Riverwest Pty Ltd [2004] WASC 81; BC200402496 at [68]-[70] per Barker J. Compare Re Wait [1927] 1 Ch 606; [1926] All ER Rep 433, CA; Re Goldcorp Exchange Ltd (in rec) [1995] 1 AC 74; [1994] 2 All ER 806, PC; Chief Commissioner of Stamp Duties v ISPT Pty Ltd (1998) 45 NSWLR 639; 9 BPR 16,735; BC9807013 per Mason P; In the Marriage of Cierpiatka (1999) 25 Fam LR 548 at 554-5; (1999) FLC 92-864; [1999] FamCA 1286, Full Court. As to shares in a company see note 5 below. 2 Stead v Mellor (1877) 5 Ch D 225; Re Reis; Ex parte Clough [1904] 2 KB 769; (1904) 91 LT 592, CA. See also Re Moore; Prior v Moore [1901] 1 Ch 936; [1900-3] All ER 140 (trust of dividends for a period incapable of being ascertained not held void) (distinguished Muir v IRC [1966] 3 All ER 38; [1966] 1 WLR 1269, CA). Contrast Re Golay; Morris v Bridgewater [1965] 2 All ER 660; [1965] 1 WLR 969 (a bequest of a reasonable income was held sufficiently certain); Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (in liq) (2000) 202 CLR 588; 171 ALR 568 at 578; [2000] HCA 25; BC200002277 per Gaudron, McHugh, Gummow and Hayne JJ (subject matter of trust identified as proportion of proceeds received by the buyer of goods). 3 Re Beardmore [1952] 1 DLR 41 (trust inter vivos to take effect on settlors death at which time his net estate was to be held in specified proportions for the respective beneficiaries held void). 4 See Re Wait [1927] 1 Ch 606; [1926] All ER Rep 433, CA; Re London Wine Co (Shippers) Ltd [1986] PCC 121; Re Goldcorp Exchange Ltd (in rec) [1995] 1 AC 74; [1994] 2 All ER 806, PC; Ying v Song [2010] NSWSC 1500; BC201010034 at [236] per Ward J. 5 Hunter v Moss [1994] 3 All ER 215; [1994] 1 WLR 452 (followed in Re Harvard Securities Ltd (in liq); Holland v Newbury [1997] 2 BCLC 369, as a binding authority in relation to the English shares, but reluctantly, having regard to the cases in note 4 above). As to criticism of Hunter v Moss [1994]

3 All ER 215; [1994] 1 WLR 452 see Hayton D, Uncertainty and Subject-Matter of Trusts (1994) 110 LQR 335. In Re Harvard Securities Ltd (in liq); Holland v Newbury [1997] 2 BCLC 369 it was held in relation to Australian shares that Hunter v Moss, above, did not apply and that none of those shares were held in trust for the former clients. Compare White v Shortall (2006) 68 NSWLR 650; 206 FLR 254; 60 ACSR 654; [2006] NSWSC 1379; BC200610509 (where Campbell J did not find the reasoning in Hunter v Moss as sufficiently persuasive (at [191]), although his Honour accepted that [g]iven the nature of shares in a company, it is perfectly sensible to talk about an individual having a beneficial interest in 222,000 shares out of a parcel of 1.5 million, even if it is not possible to identify individual shares that are held on trust (at [212])) (affirmed Shortall v White (2008) DFC 95-411; [2007] NSWCA 372; BC200711458). 6 Sprange v Barnard (1789) 2 Bro CC 585 at 587, 588; 29 ER 320 at 322; Cowman v Harrison (1852) 10 Hare 234; 68 ER 913; Henderson v Cross (1861) 29 Beav 216 at 220; 54 ER 610 at 611; Mussoorie Bank Ltd v Raynor (1882) LR 7 App Cas 321; Parnall v Parnall (1878) 9 Ch D 96; Re Jones; Richards v Jones [1898] 1 Ch 438; (1898) 78 LT 74; Wright v Wright [1913] VLR 358; (1913) 19 ALR 321; Re Warren; Perpetual Executors and Trustees Assn of Australia Ltd v Warren (1917) 23 ALR 266; Mowsar v Birrell (1929) 29 SR (NSW) 506; 46 WN (NSW) 173; Re Aspinall [1936] SASR 468; Re Hervey; Stephens v Marks [1936] St R Qd 217; Re Kipping; Shearer v Hill [1948] St R Qd 247; Re Ferguson; Froomes v Ferguson [1957] VR 635; [1958] ALR 242; Re Murray (decd); Equity Trustees Executors and Agency Co Ltd v Murray [1958] VR 4; [1958] ALR 605; Ritchie v Magree (1964) 114 CLR 173; [1964] ALR 649. See also Re Clark (1925) 28 WALR 27. 7 Mussoorie Bank Ltd v Raynor (1882) LR 7 App Cas 321 at 331; Wright v Wright [1913] VLR 358; (1913) 19 ALR 321. 8 Henderson v Cross (1861) 29 Beav 216 at 220; 54 ER 610 at 611; Re Wilcocks Settlement (1875) 1 Ch D 229 at 231. 9 Perry v Merritt (1874) LR 18 Eq 152 at 154; Rodger v Rodger (1893) 12 NZLR 392 at 395. The illogicality of that combination was referred to in Re Ferguson; Froomes v Ferguson [1957] VR 635 at 639, 640; [1958] ALR 242 at 247. 10 Re Last [1958] P 137; [1958] 1 All ER 316; [1958] 2 WLR 186; Brown v Brown (1886) 20 SALR 98. Contrast Re Gangell (1912) 8 Tas LR 120 (a gift to A of a share of the testators personal estate was held to be an absolute gift, even though a later provision of the will directed that the income of that share be paid to A for life and that the corpus be then held for other named beneficiaries). 11 Bull v Constable (1849) 3 De G & Sm 411; 64 ER 359; Re Brooks Will (1865) 2 Drew & Sm 362; 62 ER 659; Bunn v Kain (1892) 9 WN (NSW) 88; Re Ridgway; Sutherland v Ridgway (1900) 26 VLR 254; 6 ALR 93; Re Carless; Carless v Carless (1911) 11 SR (NSW) 388; 28 WN (NSW) 112; Re McNeight (decd); Lindsay v McClenaghan [1916] VLR 292; (1916) 22 ALR 140; In the Will of Ross (decd); Stewart v Stewart [1917] VLR 318; (1917) 38 ALT 181; Re Pryor; Woods v Pryor [1923] SASR 199; Public Trustee v Roberts [1966] SASR 269. Cases of this type were distinguished in Re Ferguson; Froomes v Ferguson [1957] VR 635; [1958] ALR 242, where there was no express authority or direction in the will to pay debts and funeral and testamentary expenses, and partly for that reason the residue was interpreted (notwithstanding the contrary conclusion in Re Sheldon and Kemble (1885) 53 LT 521) as referring to the amount remaining at the primary donees death and not, as in Re Brooks Will (1865) 2 Drew & Sm 362; 62 ER 659, to the amount remaining after payment of debts and funeral and testamentary expenses. 12 Re Pounder (1886) 56 LJ Ch 113; Taylor v Taylor (1896) 17 LR (NSW) Eq 43; Re Sanford; Sanford v Sanford [1901] 1 Ch 939; Re Room (1908) 4 Tas LR 18; In the Will of Comstock; Comstock v Worrall [1918] VLR 398; (1918) 24 ALR 164; Gilham v Walker [1919] St R Qd; [1919] QWN 5; Re McIntosh [1929] SASR 21; In the Estate of Ward (decd) [1957] SASR 125; Re Rollings (1974) 9 SASR 418.

13 Re Lowman; Devenish v Pester [1895] 2 Ch 348 (personal estate); Re Dunstan; Dunstan v Dunstan [1918] 2 Ch 304 (real estate). 14 Compare Sprange v Barnard (1789) 2 Bro CC 585; 29 ER 320, and other cases referred to in note 6 above. 15 As to secret trusts see [430-350]-[430-375]. 16 As to mutual wills see [430-655], succession [395-120]. 17 Birmingham v Renfrew (1937) 57 CLR 666; [1937] VLR 327; (1937) 11 ALJ 188; [1937] ALR 520; Re Cleaver (decd); Cleaver v Insley [1981] 2 All ER 1018; [1981] 1 WLR 939 (mutual wills). See also Ottaway v Norman [1972] Ch 698; [1971] 3 All ER 1325; [1972] 2 WLR 50 (secret trusts). 18 Birmingham v Renfrew (1937) 57 CLR 666 at 690; [1937] VLR 327; (1937) 11 ALJ 188; [1937] ALR 520 at 528 per Dixon J (as explained in Re Cleaver (decd); Cleaver v Insley [1981] 2 All ER 1018 at 1024; [1981] 1 WLR 939 at 947). 19 See [430-4353]. 20 Chapman v Brown (1801) 6 Ves 404; 31 ER 1115; Re Porter; Porter v Porter [1925] Ch 746; [1925] All ER Rep 179; Pooley v Royal Alexandra Hospital for Children (1932) 32 SR (NSW) 459; 49 WN (NSW) 156; Re Dalziel; Midland Bank Executor and Trustee Co Ltd v St Bartholomews Hospital [1943] Ch 277; [1943] 2 All ER 656. 21 Mitford v Reynolds (1848) 16 Sim 105; 60 ER 812; Champney v Davy (1879) 11 Ch D 949 at 954-5; Re Vaughan; Vaughan v Thomas (1886) 33 Ch D 187; 55 LT 547; Muir v Archdall (1918) 19 SR (NSW) 10; 36 WN (NSW) 4; Re Coxen; McCallum v Coxen [1948] Ch 747; [1948] 2 All ER 492. See also Re Birkett (1878) 9 Ch D 576; [1874-80] All ER Rep 224 (Jessel MR agreed with the principle as applied in the above cases but followed the decisions in the first four cases in note 22 below as having established a precedent he should not disturb). 22 Fisk v A-G (1867) LR 4 Eq 521; Hunter v Bullock (1872) LR 14 Eq 45; Dawson v Small (1874) LR 18 Eq 114; Re Williams (1877) 5 Ch D 735; Re Birkett (1878) 9 Ch D 576; [1874-80] All ER Rep 224; Re Rogerson; Bird v Lee [1901] 1 Ch 715; [1900-3] All ER Rep Ext 1552. 23 Boyce v Boyce (1849) 16 Sim 476; 60 ER 959. The paragraph below is current to 20 April 2012

[430-270] No trust of future property There cannot be a present trust of future property1 (being an expectancy or property not yet in existence or not yet the property of the person purporting or intending to create the trust) as that would be a trust of nothing at all.2 It is immaterial whether the settlor makes a purported voluntary assignment of future property to trustees on declared trusts,3 or whether he or she purports to declare that he or she is holding future property on specified trusts.4 If valuable consideration has been given for the purported creation of a trust, by assignment or by declaration, in respect of property which is to come into existence or be acquired in the future, immediately the property does come into existence or is acquired, but not before,5 equity, treating as done that which ought to be done, fastens upon the property, operating to transfer the beneficial interest to the beneficiary, so that the trust is completely constituted,6 but that result will only occur in relation to property which, on its coming into existence, is capable of being identified as being, or as being part of, the subject matter of the assignment or declaration.7 If the property assigned is income paid as money, it is only when the money reaches the hands of the assignor that equity seizes upon it and binds the conscience of the assignor to hold it for the assignee.8

Future property not capable of being the subject matter of a present trust, but which may be the subject of a trust enforceable in equity once the property has come into existence, if consideration has passed, includes:

(1) the spes successionis or interest which a person potentially has under the will or intestacy of a living person,9 or pursuant to the administration of a deceased persons estate;10 (2) an interest dependent on the exercise of a power of appointment;11 (3) copyright in works not yet created;12 (4) future royalties;13 (5) future book debts;14 (6) freight not yet earned;15 (7) dividends not yet declared;16 (8) the proceeds of any future sale of specific property;17 (9) damages which may be recovered in pending litigation;18 and (10) rent to be received.19

It can be difficult to distinguish an expectancy from a present right to receive a future benefit,20 or to determine whether what purports to be assigned is, for example, a debt (that is, the present right to claim against the debtor) or the proceeds when payment of the debt is made.21 One distinction that has been established is between an equitable assignment for value carrying with it a right to income generated in the future, in which case the assignment takes effect at once, and an equitable assignment for value of mere future income, dissociated from the proprietary interest with which it is ordinarily associated, in which case the assignment takes effect when the entitlement to that income crystallises or when it is received, but not before.22 Existing vested or contingent rights to obtain

property at some future time are present property, not expectancies.23

Notes 1 Re Ellenborough; Towry Law v Burne [1903] 1 Ch 697; (1903) 72 LJ Ch 218; 87 LT 714. 2 Collyer v Isaacs (1881) 19 Ch D 342 at 351; [1881-85] All ER Rep 828 per Jessel MR, CA. 3 Re the Stamps Acts and Rules Settlement [1915] VLR 670; (1915) 21 ALR 499; Redman v Permanent Trustee Co of New South Wales Ltd (1916) 22 CLR 84; 22 ALR 365; Re Brooks Settlement Trusts; Lloyds Bank Ltd v Tillard [1939] Ch 993; [1939] 3 All ER 920; Norman v FCT (1963) 109 CLR 9; [1964] ALR 131; BC6300080; Williams v IRC [1965] NZLR 395. 4 Brennan v Morphett (1908) 6 CLR 22; Permanent Trustee Co v Scales (1930) 30 SR (NSW) 391; 47 WN (NSW) 151. Contrast Tunley v FCT (1927) 39 CLR 528. 5 Permanent Trustee Co v Scales (1930) 30 SR (NSW) 391; 47 WN (NSW) 151. 6 Holroyd v Marshall (1862) 10 HL Cas 191; [1861-73] All ER Rep 414; (1862) 11 ER 999; Re Clarke; Coombe v Carter (1887) 36 Ch D 348; 56 LJ Ch 981; 57 LT 823; Tailby v Official Receiver (Trustee of the property of HG Izon, a bankrupt) (1888) LR 13 App Cas 523; [1886-90] All ER Rep 486, HL; Caraher v Lloyd (Official Assignee) (1905) 2 CLR 480; 11 ALR 400; Peter v Shipway (1908) 7 CLR 232; 15 ALR 214; [1908] HCA 52; Re Lind; Industrials Finance Syndicate Ltd v Lind [1915] 2 Ch 345 at 360 per Swinfen Eady LJ, at 365-6 per Phillimore LJ, at 373 per Bankes LJ; [1914-15] All ER Rep 527 at 531 per Swinfen Eady LJ, at 534 per Phillimore LJ, at 537-8 per Bankes LJ, CA; Palette Shoes Pty Ltd (in liq) v Krohn (1937) 58 CLR 1 at 13 per Latham CJ, at 35 per McTiernan J; [1937] ALR 432 at 435 per Latham CJ, at 444 per McTiernan J; Federal Commissioner of Taxation v Betro Harrison Constructions Pty Ltd (1978) 20 ALR 647; 37 FLR 154; Federal Commissioner of Taxation v Everett (1980) 143 CLR 440 at 450; 28 ALR 179 at 185 (see also Federal Commissioner of Taxation v Everett (1978) 21 ALR 625 at 644; 38 FLR 26 per Deane J, Fed C of A, Full Court); Booth v FCT (1987) 164 CLR 159; 76 ALR 375; 62 ALJR 40; 19 ATR 514; Re Androma Pty Ltd [1987] 2 Qd R 134, SC(QLD), Full Court; Deputy Commissioner of Taxation (NSW) v Donnelly (1989) 25 FCR 432; 89 ALR 232 at 255-7 per Hill J, Fed C of A, Full Court; Liedig v FCT (1994) 121 ALR 561, Fed C of A. As to the effect of bankruptcy and subsequent discharge of the assignor on a purported assignment for value of future property see Collyer v Isaacs (1881) 19 Ch D 342; [1881-85] All ER Rep 828; Deputy Commissioner of Taxation v GIO (NSW) (1993) 45 FCR 284; 117 ALR 61 at 73-4, Fed C of A, Full Court. Contrast Re Reis; Ex parte Clough [1904] 2 KB 769; (1904) 91 LT 592 (affirmed on a different point Clough v Samuel [1905] AC 442, HL). 7 Tailby v Official Receiver (Trustee of the property of HG Izon, a bankrupt) (1888) LR 13 App Cas 523; [1886-90] All ER Rep 486, HL. 8 Liedig v FCT (1994) 121 ALR 561, Fed C of A. 9 Re Parsons; Stockley v Parsons (1890) 45 Ch D 51; Re Mudge [1914] 1 Ch 115, CA; Re Lind; Industrials Finance Syndicate Ltd v Lind [1915] 2 Ch 345; [1914-15] All ER Rep 527, CA. 10 Livingston v Cmr of Stamp Duties (Qld) (1960) 107 CLR 411; [1961] Qd R 118; [1961] ALR 534; (1960) 34 ALJR 425 (affirmed Commissioner of Stamp Duties (Qld) v Livingston (1964) 112 CLR 12; [1965] AC 694; [1964] 3 All ER 692; [1964] 3 WLR 963, PC). 11 Re the Stamps Acts and Rules Settlement [1915] VLR 670; (1915) 21 ALR 499; Re Brooks Settlement Trusts; Lloyds Bank Ltd v Tillard [1939] Ch 993; [1939] 3 All ER 920. 12 Performing Right Society Ltd v London Theatre of Varieties Ltd [1924] AC 1 at 13 per Viscount

Cave LC, at 32 per Lord Phillimore; [1923] All ER Rep Ext 794, HL. 13 Shepherd v Cmr of Taxation (Cth) (1965) 113 CLR 385; [1966] ALR 969; (1965) 39 ALJR 351; 9 AITR 739. 14 Tailby v Official Receiver (Trustee of the property of HG Izon, a bankrupt) (1888) LR 13 App Cas 523; [1886-90] All ER Rep 486, HL. 15 Lindsay v Gibbs (1856) 22 Beav 522; 52 ER 1209. 16 Norman v FCT (1963) 109 CLR 9; [1964] ALR 131; BC6300080. 17 Palette Shoes Pty Ltd (in liq) v Krohn (1937) 58 CLR 1; [1937] ALR 432. 18 Glegg v Bromley [1912] 3 KB 474; [1911-13] All ER Rep 1138, CA; Grovewood Holdings Plc v James Capel & Co Ltd [1995] Ch 80; [1994] 4 All ER 417; [1995] 2 WLR 70. 19 Booth v FCT (1987) 164 CLR 159; 76 ALR 375; 62 ALJR 40; 19 ATR 514. 20 Palette Shoes Pty Ltd (in liq) v Krohn (1937) 58 CLR 1; [1937] ALR 432; Norman v FCT (1963) 109 CLR 9; [1964] ALR 131; BC6300080, HC of A; Williams v IRC [1965] NZLR 395, CA(NZ); Shepherd v Cmr of Taxation (Cth) (1965) 113 CLR 385; [1966] ALR 969; (1965) 39 ALJR 351; 9 AITR 739, HC of A; Federal Commissioner of Taxation v Everett (1980) 143 CLR 440; 28 ALR 179; Booth v FCT (1987) 164 CLR 159; 76 ALR 375; 62 ALJR 40; 19 ATR 514. 21 Palette Shoes Pty Ltd (in liq) v Krohn (1937) 58 CLR 1 at 13; [1937] ALR 432 at 435 per Latham CJ; Federal Commissioner of Taxation v Betro Harrison Constructions Pty Ltd (1978) 20 ALR 647; 37 FLR 154, Fed C of A, Full Court. Compare Norman v FCT (1963) 109 CLR 9; [1964] ALR 131; BC6300080; Shepherd v Cmr of Taxation (Cth) (1965) 113 CLR 385; [1966] ALR 969; (1965) 39 ALJR 351; 9 AITR 739, HC of A. 22 Federal Commissioner of Taxation v Everett (1980) 143 CLR 440 at 450, 451; 28 ALR 179 at 185. See, however, Booth v FCT (1987) 164 CLR 159; 76 ALR 375; 62 ALJR 40; 19 ATR 514, HC of A. 23 Peter v Shipway (1908) 7 CLR 232; 15 ALR 214; [1908] HCA 52; Buhlmann v Nilson (1921) 29 CLR 417 at 421-2; 27 ALR 318 at 321 per Knox CJ; Public Curator of Queensland v Union Trustee Co of Australia Ltd (1922) 31 CLR 66 at 74-5; 28 ALR 438 at 441 per Higgins J; Re Rallis Will Trusts; Re Rallis Marriage Settlement; Calvocoressi v Rodocanachi [1964] Ch 288; [1963] 3 All ER 940; Re Midletons Will Trusts; Whitehead v Earl Midleton [1969] 1 Ch 600 at 607; [1967] 2 All ER 834 at 837.

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(D) Illegality, Fraud and Dispositions Contrary to Public Policy The paragraph below is current to 20 April 2012 [430-380] Immoral and illegal trusts On the principle that equity follows the law, a trust cannot be enforced in equity if it is created for an object or purpose of such a kind that a direct gift or contract involving such an object or purpose cannot be enforced at law on the ground of being immoral or otherwise contrary to public policy or illegal.1 However, merely because the trustee commits illegal acts in executing the trust does not mean that the trust was created for an illegal purpose, provided that the trustee was not required by the terms of the trust to commit these acts.2

Notes 1 Hamilton v Duke of Esten (1820) 2 Bli 196 at 209; 4 ER 300, HL; Brown v Burdett (1882) 21 Ch D 667 ; Thompson v Thomas (1891) 27 LR Ir 457; Morley v Rennoldson [1895] 1 Ch 449 , CA; Phillips v Probyn [1899] 1 Ch 811; (1899) 68 LJ Ch 401; 80 LT 513 ; Maurice v Lyons [1969] 1 NSWR 307 at 312; (1969) 13 FLR 475 per Helsham J; Blathwayt v Baron Cawley [1976] AC 397; [1975] 3 All ER 625; [1975] 3 WLR 684 . See also Trustees of Church Property of the Diocese of Newcastle v Ebbeck (1960) 104 CLR 394; [1961] ALR 339 .2 Edmunds v Pickering (1999) 75 SASR 407 at 566 per Lander J (affirmed Pickering v Smoothpool Nominees Pty Ltd (2001) 81 SASR 175 at 193-4; [2001] SASC 387; BC200107893 per Gray J , Full Court). The paragraph below is current to 20 April 2012 [430-385] Attempts to alter rules of devolution on intestacy Where a trust confers an absolute equitable interest in real or personal property on a person, any provision for a gift over on the occurrence of a specified event is void for repugnancy to the gift of the absolute interest if it constitutes an attempt to interfere with the ordinary rules of devolution on intestacy1 or with other inherent ownership rights or attributes.2 Notes 1 Gulliver v Vaux (1746) 8 De GM & G 167n; 44 ER 353; Re Yalden (1851) 1 De GM & G 53; 42 ER 471; Holmes v Godson (1856) 8 De GM & G 152; 44 ER 347 ; Re Mortlocks Trust (1857) 3 K & J 456; 69 ER 1189; Barton v Barton (1857) 3 K & J 512; 69 ER 1212; Re Wilcocks Settlement (1875) 1 Ch D 229 ; Re Dixon; Dixon v Charlesworth [1903] 2 Ch 458 ; Re Patterson; Patterson v Trustees Executors and Agency Co Ltd [1939] VLR 66; [1939] ALR 113 . See also Re Ashton; Ballard v Ashton [1920] 2 Ch 481; (1920) 124 LT 374 .2 Watkins v Williams; Haverd v Church (1851) 3 Mac & G 622; 42 ER 400 ; Shaw v Ford (1877) 7 Ch D 669 ; Perry v Merritt (1874) LR 18 Eq 152; Re Dugdale; Dugdale v Dugdale (1888) 38 Ch D 176 . See also [430-440]. The paragraph below is current to 20 April 2012 [430-390] Restraints on alienation If property is given in trust absolutely for a beneficiary, any proviso or condition purporting to prohibit, or severely restrict,1 the alienation of that property, by causing the beneficiarys interest to be forfeited, or to become liable to be terminated, on attempted alienation, is void as being repugnant to the absolute equitable interest of the beneficiary.2 A condition which, while leaving the beneficiary free to alienate the property, operates as a substantial disincentive to alienation by requiring that a material amount be paid to other persons out of the proceeds, is also void.3 A partial restriction on alienation will not be void if it leaves the beneficiary with a considerable freedom to alienate.4 If the beneficiarys interest is not constituted or described as an absolute interest subject to termination or forfeiture, but is expressed to endure for the period ending when alienation occurs or is attempted5 the limitation will not be void as a restraint on alienation but will create a valid determinable interest.6 Provision for a gift over is not an essential element in the constitution of a valid determinable interest.7 Notes 1 For example, to a small number of specified relatives: Attwater v Attwater (1853) 18 Beav 330; 52 ER 131 ; Re Dunn; Dunn v McCowan [1927] St R Qd 265 ; Re Brown; District Bank Ltd v Brown [1954] Ch 39; [1953] 2 All ER 1342 ; Re Mavromates [1964] VR 612 . See also Re Rosher; Rosher v Rosher (1884) 26 Ch D 801; [1881-85] All ER Rep Ext 1301; (1884) 53 LJ Ch

722; 51 LT 785 ; Re McKay; McKay v McKay (1902) 22 NZLR 121 ; Re Cockerill; Mackaness v Percival [1929] 2 Ch 131 . Compare Grayson v Grayson [1922] St R Qd 155 . See also note 4 below. As to restriction on alienation applying only for a specified period see Re Rosher; Rosher v Rosher (1884) 26 Ch D 801; [1881-85] All ER Rep Ext 1301; (1884) 53 LJ Ch 722; 51 LT 785 ; In the Will of McKellar [1915] VLR 220 .2 Brandon v Robinson (1811) 18 Ves 429; 34 ER 379 ; Graves v Dolphin (1826) 1 Sim 66; 57 ER 503; Green v Spicer (1830) 1 Russ & My 395; 39 ER 153; Ware v Cann (1830) 10 B & C 433; 109 ER 511 ; Snowdon v Dales (1834) 6 Sim 524; [1824-34] All ER Rep 425; (1834) 3 LJ Ch 188; 58 ER 690 ; Attwater v Attwater (1853) 18 Beav 330; 52 ER 131 ; Hood v Oglander (1865) 34 Beav 513; 55 ER 733 ; Re Machu (1882) 21 Ch D 838 ; James v Gard (1887) 13 VLR 908; 9 ALT 111 ; Re Dugdale; Dugdale v Dugdale (1888) 38 Ch D 176 ; Metcalfe v Metcalfe (1889) 43 Ch D 633 at 639 ; Gazzard v Jobbins (1893) 14 LR (NSW) Eq 28; 9 WN (NSW) 106 ; Watson v Bodman (1896) 22 VLR 506; 3 ALR 7 ; Re Elmslie; Elmslie v Elmslie [1907] St R Qd 131 ; Palmer v Permanent Trustee Co (1915) 16 SR (NSW) 162; 33 WN (NSW) 40 ; Lucas v Goldie [1920] NZLR 28 ; Re Williams Settlement; Trustees Executors and Agency Co Ltd v James [1923] VLR 609; (1923) 29 ALR 440 ; Re Orr [1940] SASR 395 ; Re Goode (decd); Spiller v Kennedy [1960] VR 117 ; Nullagine Investments Pty Ltd v Western Australian Club Inc (1993) 177 CLR 635; 116 ALR 26 at 33; 67 ALJR 739 per Brennan J; Caboche v Ramsay (1993) 119 ALR 215 at 226-8; 27 ATR 479 per Gummow J . For the view that restraints on alienation are invalid because they are inherently contrary to public policy, which covers cases where the repugnancy explanation would not be applicable, see Nullagine Investments Pty Ltd v Western Australian Club Inc (1993) 177 CLR 635; 116 ALR 26; 67 ALJR 739 . A covenant not to alienate is not void for repugnancy to an absolute interest, because, if the covenant is breached, there may be a right to damages, but the validity of the alienation will not be affected, and if the attempted alienation is frustrated by an injunction there will be no termination or forfeiture of the intending disposers interest: Caldy Manor Estate Ltd v Farrell [1974] 3 All ER 753; [1974] 1 WLR 1303 , CA.3 Re Elliot; Kelly v Elliot [1896] 2 Ch 353 ; Re Patterson; Patterson v Trustees Executors and Agency Co Ltd [1939] VLR 66; [1939] ALR 113 ; Public Trustee v Ross (1972) 3 SASR 462 .4 Doe d Gill v Pearson (1805) 6 East 173; 102 ER 1253 ; Re Macleay (1875) LR 20 Eq 186; 44 LJ Ch 441; 32 LT 682. These cases were distinguished in the later cases in note 2 above, and the exception they establish was extensively criticised in Re Rosher; Rosher v Rosher (1884) 26 Ch D 801 at 813-19; [1881-85] All ER Rep Ext 1301; (1884) 53 LJ Ch 722; 51 LT 785 per Pearson J .5 As to alienation occurring by operation of law see Rochford v Hackman (1852) 9 Hare 475 at 484; 68 ER 597 at 601 per Sir G J Turner VC ; Craven v Brady (1869) LR 4 Ch App 296 at 298; Re Detmold; Detmold v Detmold (1889) 40 Ch D 585; 58 LJ Ch 495 . As to alienation resulting from exercise of a right vested in a person other than the beneficiary see Oliver v Oliver (1958) 99 CLR 20 .6 Caboche v Ramsay (1993) 119 ALR 215 at 226-8; 27 ATR 479 . See also Lockyer v Savage (1733) 2 Stra 947; 93 ER 959 ; Ex parte Hinton (1808) 14 Ves 598; 33 ER 650; Rochford v Hackman (1852) 9 Hare 475; 68 ER 597 ; Joel v Mills (1857) 3 K & J 458; 69 ER 1189; Oldham v Oldham (1867) LR 3 Eq 404; Hatton v May (1876) 3 Ch D 148 ; James v Gard (1887) 13 VLR 908; 9 ALT 111 ; Re Detmold; Detmold v Detmold (1889) 40 Ch D 585; 58 LJ Ch 495 ; Nullagine Investments Pty Ltd v Western Australian Club Inc (1993) 177 CLR 635; 116 ALR 26 at 33; 67 ALJR 739 per Brennan J . As to a case where the restraint was held to be void but the possibility of its having been formulated as a valid determinable interest was expressly recognised see Brandon v Robinson (1811) 18 Ves 429 at 432-3; 34 ER 379 at 380-1 . For an example of one share (for a son) in a fund being subject to a void restraint on alienation and the other (equal) share (for a daughter) conferring only a limited interest see In the Will of Pattison (decd); McKinley v Parkinson (1903) 10 ALR 36; 25 ALT 186 . A valid determinable life interest may be established by giving property to A for life, with a proviso that on attempted alienation it goes to B: Hurst v Hurst (1882) 21 Ch D 278; [1881-85] All ER Rep 903 , CA; Nixon v Verry (1885) 29 Ch D 196; 53 LT 18 . See further [430-395].7 Dommett v Bedford (1796) 6 Term Rep 684; 101 ER 771; Rochford v Hackman (1852) 9 Hare 475 at 481-3; 68 ER 597 at 600-1 per Sir G J Turner VC; Joel v Mills (1857) 3 K & J 458 at 468; 69 ER 1189 at 1194 per Sir W Page Wood VC; Craven v Brady (1869) LR 4 Ch App 296. The paragraph below is current to 20 April 2012

To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [430-395] Trusts to terminate on bankruptcy Where a trust gives a vested interest for life or in fee simple, subject to a condition subsequent that it will determine upon the bankruptcy of the life tenant, with a gift over to another person or on other trusts, the condition is void and the interest is unqualified.1 Also, if a person has a specific asset not subject to a deprivation provision, then a deprivation provision to which he or she subsequently agrees to make it subject is unenforceable in the event of insolvency.2 On the other hand, the intended effect of such a condition can be validly achieved if the qualification of the interest3 of the principal beneficiary is formulated not as a condition subsequent but as a limitation creating a determinable interest to exist only until bankruptcy occurs or some other specified form of alienation is effected or attempted.4 Such a determinable interest will not, however, be valid in so far as the property made subject to the trust was the principal beneficiarys own property,5 unless the determining event was alienation to a particular alienee rather than to the creditors generally or the trustee in bankruptcy.6 Distinctions of this kind are not, however, always easy to make, a point judicially noted on more than one occasion.7 If the principal beneficiarys life interest is determinable on other events as well as on bankruptcy, and it in fact determines validly prior to bankruptcy, and the gift over takes effect, there will no longer be a life interest capable of passing to the principal beneficiarys trustee in bankruptcy.8 Where a valid determinable interest is established, the gift over when the interest determines can either be outright or in the form of a discretionary trust.9 Under such a discretionary trust the trustee may be given a discretion to pay all or part of the income to the bankrupt principal beneficiary, but it appears that such a payment could not be made because it would have the effect of a payment to the principal beneficiarys trustee in bankruptcy who would not be one of the discretionary beneficiaries (known as a protective trust).10 However, the trustee could, if so authorised by the terms of the trust, apply income in payment for services supplied to, or otherwise for the benefit of, the bankrupt principal beneficiary, because that would not involve the passing of any property which could vest in the trustee in bankruptcy.11 The trustee legislation in all jurisdictions except the Northern Territory and South Australia12 makes provision for a discretionary trust on terms specified in the legislation to be incorporated in a trust instrument13 by directing that income is to be held on protective trusts for a person identified as the principal beneficiary for a trust period being that persons life or a specified lesser period.14 The legislation provides that the trust of income will fail or determine at the end of the trust period, or earlier if the principal beneficiary does or attempts to do or suffers any act or thing or if any event happens whereby, if the income were payable to the principal beneficiary absolutely, he or she would be deprived of the right to receive all or any part of it.15 Events that deprive a principal beneficiary of the right to receive an entitlement to income include an order in bankruptcy16 and an attempt to charge.17 But the mere granting of a Mareva order 18 against the principal beneficiary is not an event by which he or she might be wholly or partly deprived of the right to receive income.19 If the trust of income so fails or determines within the trust period the income during the remainder of that period will be held for application at the discretion of the trustee for the maintenance, support or otherwise for the benefit20 of all or any one or more of the principal beneficiary and specified categories of relatives.21 The legislation stipulates that any trusts implied by it may be set aside in any case where an express trust to the same effect might be set aside.22 The foregoing, in so far as bankruptcy is concerned, must be read against bankruptcy legislation which renders void a provision in a trust deed to the extent that it has the effect of:

(1) cancelling, reducing or qualifying a beneficiarys interest under a trust; or (2) allowing the trustee to exercise a discretion to the detriment of a beneficiarys interest, if the beneficiary becomes a bankrupt, commits an act of bankruptcy or executes a personal insolvency agreement under that legislation.23 Notes 1 Brandon v Robinson (1811) 18 Ves 429; 34 ER 379 ; Graves v Dolphin (1826) 1 Sim 66; 57 ER 503; Green v Spicer (1830) 1 Russ & My 395; 39 ER 153; Piercy v Roberts (1832) 1 My & K 4; 2 LJ Ch 17; 39 ER 582; Snowdon v Dales (1834) 6 Sim 524; [1824-34] All ER Rep 425; (1834) 3 LJ Ch 188; 58 ER 690 ; Younghusband v Gisborne (1844) 1 Coll 400; 63 ER 473 (affirmed Younghusband v Gisborne (1846) 15 LJ Ch 355). Compare Metcalfe v Metcalfe (1889) 43 Ch D 633 at 639 per Kekewich J ; Re Salom; Salom v Judell [1923] SASR 162 at 164 per Murray CJ ; Re Williams Settlement; Trustees Executors and Agency Co Ltd v James [1923] VLR 609; (1923) 29 ALR 440 ; Caboche v Ramsay (1993) 119 ALR 215 at 226-8; 27 ATR 479 per Gummow J ; Re Scientific Investment Pension Plan Trusts [1999] Ch 53 at 59; [1998] 3 All ER 154 per Rattee J .2 Money Markets International Stockbrokers Ltd (in liq) v London Stock Exchange Ltd [2001] 4 All ER 223 at 250; [2002] 1 WLR 1150 per Neuberger J .3 The principle may apply in respect of a fee simple as well as a life interest: Re Leach; Leach v Leach [1912] 2 Ch 422 . For criticism of that decision see Sweet, Restraints on Alienation (1917) 33 LQR 236; Harrison W N, Hall v Busst (1961) 35 ALJ 5.4 Brandon v Robinson (1811) 18 Ves 429; 34 ER 379 ; Higinbotham v Holme (1812) 19 Ves 88; 34 ER 451 ; Rochford v Hackman (1852) 9 Hare 475; 68 ER 597 ; Billson v Crofts (1873) LR 15 Eq 314; Re Aylwins Trusts (1873) LR 16 Eq 585; Re Detmold; Detmold v Detmold (1889) 40 Ch D 585; 58 LJ Ch 495 ; Caboche v Ramsay (1993) 119 ALR 215 at 226-8; 27 ATR 479 per Gummow J; Re Scientific Investment Pension Plan Trusts [1999] Ch 53 at 60-1; [1998] 3 All ER 154 per Rattee J ; Money Markets International Stockbrokers Ltd (in liq) v London Stock Exchange Ltd [2001] 4 All ER 223 at 247; [2002] 1 WLR 1150 per Neuberger J . Compare Re Solomon [1908] SALR 107 . As to the possibility of a determinable life interest taking effect in respect of bankruptcy or alienation preceding the settlement see West v Williams [1898] 1 Ch 488 ; Re Walker; Public Trustee v Walker [1939] Ch 974; [1939] 3 All ER 902 .5 Higinbotham v Holme (1812) 19 Ves 88; 34 ER 451 ; Re Pearson; Ex parte Stephens (1876) 3 Ch D 807 ; Mackintosh v Pogose [1895] 1 Ch 505; (1895) 72 LT 251 ; Re Brewers Settlement; Moreton v Blackmore [1896] 2 Ch 503 ; Re Holland; Gregg v Holland [1902] 2 Ch 360 ; Re Burroughs-Fowler; Trustee of the Property of Burroughs-Fowler v Burroughs-Fowler [1916] 2 Ch 251 . See also Wyld v Caldwell (1870) 9 SCR (NSW) Eq 62 at 68-9 . As to the determinable interest being invalid only in respect of property settled or contributed by the principal beneficiary, but valid in respect of property contributed by another, see Brooke v Pearson (1859) 27 Beav 181; 54 ER 70; Mackintosh v Pogose [1895] 1 Ch 505; (1895) 72 LT 251 ; Re Wombwell [1921] All ER Rep 483; (1921) 37 TLR 625. As to a settlement of property already jointly owned by the primary beneficiary and another not being a settlement of the primary beneficiarys own property see Re Ashby; Ex parte Wreford [1892] 1 QB 872 .6 Brooke v Pearson (1859) 27 Beav 181; 54 ER 70; Knight v Browne (1861) 7 Jur NS 894; 30 LJ Ch 649; Re Pearson; Ex parte Stephens (1876) 3 Ch D 807 ; Re Detmold; Detmold v Detmold (1889) 40 Ch D 585; 58 LJ Ch 495 .7 Re Scientific Investment Pension Plan Trusts [1999] Ch 53 at 59; [1998] 3 All ER 154 per Rattee J ; Money Markets International Stockbrokers Ltd (in liq) v London Stock Exchange Ltd [2001] 4 All ER 223 at 246, 255; [2002] 1 WLR 1150 per Neuberger J .8 Brooke v Pearson (1859) 27 Beav 181; 54 ER 70; Re Detmold; Detmold v Detmold (1889) 40 Ch D 585; 58 LJ Ch 495 .9 See Billson v Crofts (1873) LR 15 Eq 314; Re Aylwins Trusts (1873) LR 16 Eq 585; Re Bullock; Goode v Lickorish (1891) 64 LT 736; 7 TLR 402 .10 Re Bullock; Goode v Lickorish (1891) 64 LT 736; 7

TLR 402 . Compare Lord v Bunn (1843) 2 Y & C Ch Cas 98; 63 ER 43. See also Re Coleman; Henry v Strong (1888) 39 Ch D 443; 60 LT 127 , CA; Re Neil; Hemming v Neil (1890) 62 LT 649; Re Ashby; Ex parte Wreford [1892] 1 QB 872 at 877 per Vaughan Williams J .11 Re Bullock; Goode v Lickorish (1891) 64 LT 736; 7 TLR 402 . Compare Re Coleman; Henry v Strong (1888) 39 Ch D 443; 60 LT 127 , CA; Re Neil; Hemming v Neil (1890) 62 LT 649. As to a possible general limitation on the effectiveness of payments for the benefit of the bankrupt principal beneficiary see Re Ashby; Ex parte Wreford [1892] 1 QB 872 at 877 per Vaughan Williams J . As to a limitation arising from the terms of the trust instrument see Re AllenMeyricks Will Trusts; Mangnall v Allen-Meyrick [1966] 1 All ER 740 at 743; [1966] 1 WLR 499 at 502 per Buckley J .12 (ACT) Trustee Act 1925 s 45 (NSW) Trustee Act 1925 s 45 (QLD) Trusts Act 1973 s 64 (TAS) Trustee Act 1898 s 30 (VIC) Trustee Act 1958 s 39 (WA) Trustees Act 1962 s 61. 13 In Queensland and Victoria, the provisions referred to in note 12 above apply to every trust whether constituted or created before or after the commencement of the relevant Act: (QLD) Trusts Act 1973 s 4(1) (VIC) Trustee Act 1958 s 2(3). In other jurisdictions the provisions referred to in note 12 above do not apply to trusts created or coming into operation before the commencement of the relevant Act: (NSW) Trustee Act 1925 s 45(10) (TAS) Trustee Act 1898 s 30(2) (WA) Trustees Act 1962 s 61(4). 14 See Re Platt; Westminster Bank v Platt [1949] 1 CLC 10-917; Re Wittke (decd); Reynolds v King Edwards Hospital Fund for London and Custodian of Enemy Property [1944] Ch 166; [1944] 1 All ER 383 ; Re Wilcox; Wilcox v Wilcox [1978] Tas SR 82 at 84 .15 (ACT) Trustee Act 1925 s 45(3) (NSW) Trustee Act 1925 s 45(3) (QLD) Trusts Act 1973 s 64(1)(a) (TAS) Trustee Act 1898 s 30(1)(a) (VIC) Trustee Act 1958 s 39(1)(a) (WA) Trustees Act 1962 s 61(2). Deprivation of the right to receive the income is basic to the operation of the legislation: Permanent Trustee Co Ltd v University of Sydney [1983] 1 NSWLR 578 at 581 per Helsham CJ in Eq. As to difficulties of construction and of characterisation of the allegedly determining event see Lee W A, Trusts and Bankruptcy (1973) 47 ALJ 365 at 374, and for examples see Re Hamilton; FitzGeorge v FitzGeorge (1921) 124 LT 737, CA; McQuade v Morgan (1927) 39 CLR 222; 1 ALJ 61; [1927] ALR 258; BC2700028 ; Irwin v Tyson (1963) 110 CLR 592; [1966] ALR 117; (1963) 37 ALJR 311; BC6300610 .

117; (1963) 37 ALJR 311; BC6300610 . 16 Re Sartoris Estate [1892] 1 Ch 11 .17 Re Richardsons Will Trusts [1958] Ch 504 ; Permanent Trustee Co Ltd v University of Sydney [1983] 1 NSWLR 578 at 584-5 per Helsham CJ in Eq.18 As to Mareva orders see equity [185-1465]-[185-1480].19 Re Coram (1992) 36 FCR 250; 109 ALR 353 at 358, 360 per OLoughlin J , Fed C of A.20 In some jurisdictions, the reference is to maintenance, education, advancement or benefit: (QLD) Trusts Act 1973 s 64(1)(b) (VIC) Trustee Act 1958 s 39(1)(b) (WA) Trustees Act 1962 s 61(3). 21 (ACT) Trustee Act 1925 s 45(6) (NSW) Trustee Act 1925 s 45(6) (QLD) Trusts Act 1973 s 64(1)(b) (TAS) Trustee Act 1898 s 30(1)(b) (VIC) Trustee Act 1958 s 39(1)(b) (WA) Trustees Act 1962 s 61(3). 22 (ACT) Trustee Act 1925 s 45(8) (NSW) Trustee Act 1925 s 45(8) (QLD) Trusts Act 1973 s 64(2) (TAS) Trustee Act 1898 s 30(3) (VIC) Trustee Act 1958 s 39(2) (WA) Trustees Act 1962 s 61(5). 23 (CTH) Bankruptcy Act 1966 s 302B. The paragraph below is current to 20 April 2012 [430-400] Trusts in general restraint of marriage Where a beneficiarys interest under a trust is subject to forfeiture on breach of a condition in general restraint of marriage, the condition and any gift over intended to follow the forfeiture are prima facie void,1 but can be valid if the real object is not to prevent marriage.2 However, there is a valid trust where the beneficiarys interest is expressed, not to be subject to a forfeiture condition, but to be limited to endure until marriage, provided there is a gift over upon that event.3 Partial restraints, that is where the forfeiture condition is directed against marriage with, for example, a named person,4 or a person of a particular nationality5 or religion6 or occupation or class,7 are valid if the restraints are defined with sufficient certainty,8 and provided that, in the case of a trust of personalty, there is provision for a gift over upon breach of the condition9 or a clear intention that the gift be revoked.10 A partial restraint in the form of a condition that the beneficiary does not marry without a specified consent, with a gift over on breach, is valid.11 The principle that conditions in restraint of marriage are prima facie void does not apply in relation to the re-marriage of a spouse, and therefore where a gift is made upon trust for either a wife or husband by the other of them, or by a third party, subject to forfeiture on the re-marriage of

the donee, that condition is valid,12 provided there is a gift over on breach.13 Notes 1 Lloyd v Lloyd (1852) 2 Sim NS 255; 61 ER 338. See also Re Hartmann; Broomby v Wagstaff [1960] Tas SR 16 ; Leong v Lim Beng Chye [1955] AC 648 at 660; [1955] 2 All ER 903 at 906; [1955] 3 WLR 303 , PC; Carrodus v Carrodus [1913] VLR 1; (1912) 18 ALR 52 . The same result follows where the condition is in restraint of the resumption of an abandoned marriage: Re Thomson [1966] SASR 278 .2 Jones v Jones (1876) 1 QBD 279 . The real object may be to make provision for the beneficiarys children (Re Hewett; Eldridge v Iles [1918] 1 Ch 458 ) or to ensure that, if the beneficiary marries, the property is dealt with, after the beneficiarys death, in accordance with the donors wishes (Re Fentem; Cockerton v Fentem [1950] 2 All ER 1073 ). See also Re Lovell; Sparks v Southall [1920] 1 Ch 122 ; Re Myers; Perpetual Trustees, Estate and Agency Co of New Zealand Ltd v Myers [1947] NZLR 828 at 856-7 per Fleming J ; Re Michelhams Will Trusts [1964] Ch 550 at 559-60; [1963] 2 All ER 188 at 193; [1963] 2 WLR 1238 at 1246 per Buckley J.3 Morley v Rennoldson (1843) 2 Hare 570 at 579; 67 ER 235 at 239 per Sir James Wigram VC; Lloyd v Lloyd (1852) 2 Sim NS 255; 61 ER 338; Jones v Jones (1876) 1 QBD 279 at 283 per Blackburn J; Re Power (decd); OLeary v Power [1904] St R Qd 93 ; Re Lovell; Sparks v Southall [1920] 1 Ch 122 ; Leong v Lim Beng Chye [1955] AC 648; [1955] 2 All ER 903; [1955] 3 WLR 303 , PC. See also Allen v Jackson (1875) 1 Ch D 399 at 404 per James LJ, at 408 per Baggallay LJ, CA.4 Jenner v Turner (1880) 16 Ch D 188 ; In the Will of Neibel (1892) 13 LR (NSW) Eq 161; Re Bathe; Bathe v Public Trustee [1925] Ch 377 . See also Re Sharp; Canty v Sharp (1904) 4 SR (NSW) 155; 21 WN (NSW) 57 .5 Perrin v Lyon (1807) 9 East 170; 103 ER 538.6 Evans v Torpy (1898) 19 LR (NSW) Eq 91; 14 WN (NSW) 185 ; Re Benjamin; Trustees Executors and Agency Co Ltd v Benjamin [1917] VLR 615; (1917) 23 ALR 369 ; In the Will of Moss; Fox v Moss [1919] VLR 192; (1919) 25 ALR 81 ; Grayson v Grayson [1922] St R Qd 155 ; Re Found; Semmens v Loveday [1924] SASR 301 ; Re Rubin; Rubin v Rubin (1938) 40 WALR 1; Re Winzar (decd); Public Trustee (WA) v Winzar (1953) 55 WALR 35 ; Re Whiting (decd); Whiting v Equity Trustees Executors and Agency Co Ltd [1957] VR 400; [1957] ALR 1058 ; Re Kearny; Equity Trustees Executors and Agency Co Ltd v Kearny [1957] VR 56; [1957] ALR 363 ; Trustees of Church Property of the Diocese of Newcastle v Ebbeck (1960) 104 CLR 394; [1961] ALR 339 ; Blathwayt v Baron Cawley [1976] AC 397; [1975] 3 All ER 625; [1975] 3 WLR 684 .7 Jenner v Turner (1880) 16 Ch D 188 .8 Re Orr [1940] SASR 395 ; Clayton v Ramsden [1943] AC 320; [1943] 1 All ER 16 ; Perpetual Trustee Co Ltd v Wansey (1945) 46 SR (NSW) 226; 63 WN (NSW) 119 ; Re Ettelson; Ettelson v Webster [1946] VLR 217; [1946] ALR 291 ; Re Solomon; Solomon v Solomon [1946] VLR 115; [1946] ALR 195 ; Re Winzar (decd); Public Trustee (WA) v Winzar (1953) 55 WALR 35 . As to the nature of the certainty required see Trustees of Church Property of the Diocese of Newcastle v Ebbeck (1960) 104 CLR 394; [1961] ALR 339 ; Re Teppers Will Trusts; Kramer v Ruda [1987] 1 All ER 970; [1987] 2 WLR 729 .9 Leong v Lim Beng Chye [1955] AC 648 at 660; [1955] 2 All ER 903 at 906; [1955] 3 WLR 303 at 307 per Lord Radcliffe, PC (confirming also the fact that upon breach of the condition the property would go to the residuary beneficiaries does not satisfy the requirement of a gift over). As to a gift over being required so that the condition is not seen to be merely in terrorem see Leong v Lim Beng Chye [1955] AC 648 at 661-2; [1955] 2 All ER 903 at 907-8; [1955] 3 WLR 303 at 308 per Lord Radcliffe, PC.10 Re Hanlon; Heads v Hanlon [1933] Ch 254 . See also Trustees Executors and Agency Co Ltd v Foy (1884) 10 VLR (E) 267; 6 ALT 111 ; Leong v Lim Beng Chye [1955] AC 648 at 662; [1955] 2 All ER 903 at 908; [1955] 3 WLR 303 at 309 per Lord Radcliffe, PC.11 Dashwood v Lord Bulkeley (1804) 10 Ves 230; 32 ER 832 ; Lloyd v Branton (1817) 3 Mer 108; 36 ER 42 ; Re Whitings Settlement; Whiting v De Rutzen [1905] 1 Ch 96 , CA; Re Kozminsky [1966] VR 299 . As to conditions of this kind being regarded with disfavour by the courts, which have been ready to hold, on very slender evidence, that such a condition has been complied with, see cases referred to in Re Kozminsky [1966] VR 299 at 304 .12 Lloyd v Lloyd (1852) 2 Sim NS 255; 61 ER 338; Allen v Jackson (1875) 1 Ch D 399 , CA; Trustees Executors and Agency Co Ltd v Foy (1884) 10 VLR (E) 267; 6 ALT 111 .13 Leong v Lim Beng Chye [1955] AC 648; [1955] 2 All ER 903; [1955] 3 WLR 303 , PC; Re Heppner; Heppner v Heppner (1913) 14 SR (NSW) 173; 30 WN

(NSW) 220 . The paragraph below is current to 20 April 2012 [430-405] Trusts detracting from the sanctity of marriage Historically a trust was treated as void, for being contrary to public policy,1 if it exposed the parties to a marriage to a real temptation to terminate the marriage and was likely to produce that result,2 or if it interfered with the consortium of marriage by introducing a source of fundamental friction.3 A trust to take effect upon the future separation of spouses was likewise viewed as contrary to public policy and void, for providing an inducement to bring to an end a marital cohabitation which might otherwise continue.4 Nevertheless, a trust contemplating an immediate separation, already agreed upon, was valid,5 but would become void if the immediate separation did not occur. 6 In contrast, a trust would be valid if it could be regarded as tending primarily to encourage the continuing cohabitation of spouses, as where a trust was established by a husband in favour of his wife for so long as their cohabitation continued, even though there was a gift over to him upon its cessation.7 Even a trust for a wife to endure only while she is separated from her husband could be valid,8 for example, where the intention of the settlor or testator is able to be identified, not as being to cause separation to occur or continue, but to provide for the wife during the separation.9 Yet public policy is capable of changing.10 What needs to be determined in relation to a particular disposition or agreement which according to earlier authorities would have been treated as contrary to public policy is whether that disposition or agreement should still be considered as so contrary to the ideas prevailing in the community as to the conditions necessary for its welfare that the court should refuse to enforce it as contrary to public policy.11 There is authority to the effect that an entitlement to property that is triggered only upon divorce may not necessarily be contrary to public policy.12 In addition, the existence of legislation which recognises relationships of a particular kind and empowers the courts to enforce rights arising out of such relationships should preclude the courts from regarding the recognition of such relationships as contrary to public policy.13 Notes 1 The policy of the law (sometimes preferred to the expression public policy: Re Hope Johnstone; Hope Johnstone v Hope Johnstone [1904] 1 Ch 470 at 474 per Kekewich J; Brooks v Burns Philp Trustee Co Ltd (1969) 121 CLR 432 at 451; [1969] ALR 321 at 332; (1969) 43 ALJR 131 per Windeyer J) is to preserve intact and inviolate the marriage contract: H v W (1857) 3 K & J 382 at 387; 69 ER 1157 at 1159 per Sir W Page Wood VC.2 Fender v St JohnMildmay [1938] AC 1 at 13; [1937] 3 All ER 402 per Lord Atkin . Compare Re Caborne; Hodge v Smith [1943] Ch 224; [1943] 2 All ER 7 ; Re Johnsons Will Trusts; National Provincial Bank Ltd v Jeffrey [1967] Ch 387; [1967] 1 All ER 553; [1967] 2 WLR 152 . For the application of the same principle to produce the opposite result see Trustees of Church Property of the Diocese of Newcastle v Ebbeck (1960) 104 CLR 394 at 403 per Dixon CJ, at 408 per Kitto J; [1961] ALR 339 .3 Fender v St John-Mildmay [1938] AC 1 at 16; [1937] 3 All ER 402 per Lord Atkin ; Trustees of Church Property of the Diocese of Newcastle v Ebbeck (1960) 104 CLR 394 at 41516; [1961] ALR 339 per Windeyer J . Compare Re Kersey [1952] WN 541 ; Re Neeld; Carpenter v Inigo-Jones [1960] Ch 455 .4 Westmeath v Westmeath (1830) 1 Dow & Cl 519; 6 ER 619; Re Moore; Trafford v Macenochie (1888) 39 Ch D 116 , CA.5 Wilson v Wilson (1848) 1 HL Cas 538; 9 ER 870 (on appeal Wilson v Wilson (1854) 5 HL Cas 40; 10 ER 811 ). See also Jodrell v Jodrell (1841) 9 Beav 45; 50 ER 259 (on appeal Jodrell v Jodrell (1851) 14 Beav 397; 51 ER 339 ).6 Hindley v Westmeath (1827) 6 B & C 200; 108 ER 427 ; Westmeath v Westmeath (1830) 1 Dow & Cl 519; 6 ER 619. See also Bindley v Mulloney (1869) LR 7 Eq 343 (the separation deed was held to be void for total failure of consideration as no separation

actually occurred).7 Re Hope Johnstone; Hope Johnstone v Hope Johnstone [1904] 1 Ch 470 .8 Re Charleton [1911] WN 54 .9 Re Lovell; Sparks v Southall [1920] 1 Ch 122 (the wifes annuity was reduced, but not terminated if she resumed cohabitation or remarried).10 Evanturel v Evanturel (1874) LR 6 PC 1 at 29; Besant v Wood (1879) 12 Ch D 605 at 620 per Jessel MR ; Re Morris (decd) (1943) 43 SR (NSW) 352 at 356; 60 WN (NSW) 201 at 202 per Jordan CJ .11 Re Morris (decd) (1943) 43 SR (NSW) 352 at 355; 60 WN (NSW) 201 per Jordan CJ; Seidler v Schallhofer [1982] 2 NSWLR 80 at 89; (1982) 8 Fam LR 598 per Hope JA , CA(NSW); Hayward v Giordani [1983] NZLR 140 at 148 per Cooke J . As to the concept of public policy and legislation which ameliorates the consequences of extra marital associations see Seidler v Schallhofer [1982] 2 NSWLR 80; (1982) 8 Fam LR 598 .12 Seidler v Schallhofer [1982] 2 NSWLR 80 at 89; (1982) 8 Fam LR 598 per Hope JA , CA(NSW).13 Ramsay v Trustees Executors and Agency Co Ltd (1948) 77 CLR 321; [1949] VLR 309; [1949] ALR 105; BC4800390 ; Ellaway v Lawson [2006] QSC 170; BC200605353 . The paragraph below is current to 20 April 2012 [430-410] Trusts interfering with parent/child relationships A trust can be void as being contrary to public policy if it tends to operate against the proper performance of the duties of a parent in respect of a child by influencing a parent to make decisions based on the prospect of material gain (for the child) rather than on consideration of the childs welfare in other respects,1 or by imposing separation of parent and child with the tendency to have a prejudicial effect upon the child and upon the judgment that has to be exercised by the parent for its benefit.2 Notes 1 Re Borwick; Borwick v Borwick [1933] Ch 657; [1933] All ER Rep 737 (requirement that a child be or not be brought up in a specified religion) (followed Re Crane (decd) [1950] VLR 192; [1950] ALR 361 ; Perpetual Trustees Co v Hogg (1936) 36 SR (NSW) 61; 53 WN (NSW) 67 ; applied Re Cross; Law v Cross [1938] VLR 221; [1938] ALR 449 ); Re Tegg; Public Trustee v Bryant [1936] 2 All ER 878 (requirement that a child be or not be educated at a school affiliated with a specified religion). See also Blathwayt v Baron Cawley [1976] AC 397; [1975] 3 All ER 625 at 626; [1975] 3 WLR 684 , HL (even though such a stipulation may influence parental judgment, it will not necessarily be found to be contrary to public policy).2 Re Sandbrook; Noel v Sandbrook [1912] 2 Ch 471 ; Re Boulter; Capital and Counties Bank v Boulter [1922] 1 Ch 75; [1921] All ER Rep 167 (applied Re Bradley [1994] 2 Qd R 233; BC9404388 ). As to the irrelevance of the parents being already divorced when the trust takes effect see Re Piper; Dodd v Piper [1946] 2 All ER 503. The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [430-415] Trusts for future ex-nuptial children Until affected by statute1 and other factors2 the long established rule of construction was that references to children would, in the absence of sufficient indication to the contrary, be treated as being only to legitimate children,3 and marriage would be regarded as the only criterion of paternity.4 Independently of those principles there has been a long-standing rule that, even where it is sufficiently clear that ex-nuptial children are being referred to or included, a trust, whether created by deed or by will, for future ex-nuptial children,5 would be void as being conducive to immorality6 and therefore contrary to public policy.7 Such a trust, if created by deed, would be void in respect of ex-nuptial children born after the date of the deed.8 Because, however, a will is revocable and does not become effective until the death of the testator, a trust created by will would not be void in so far as it is in favour of ex-nuptial children born between the date of the will and the death of the testator, provided that those children are so

described that they can be identified with certainty.9 The trust might also be valid in respect of an ex-nuptial child en ventre sa mere at the death of the testator, but would fail for uncertainty unless the child is identified solely by reference to its mother.10 In all Australian jurisdictions the rule has been abolished by statute,11 or by implication from statutory provisions relating to the interpretation of references to children or the basis for determining whether the parent and child relationship exists.12 Notes 1 See family law [205-1490], [205-1495], [205-1520]. See generally succession [395-6580].2 Harris v Ashdown (1985) 3 NSWLR 193 , CA(NSW). Compare Seidler v Schallhofer [1982] 2 NSWLR 80; (1982) 8 Fam LR 598 , CA(NSW).3 Dorin v Dorin (1875) LR 7 HL 568; [1874-80] All ER Rep 71 .4 Occleston v Fullalove (1874) LR 9 Ch App 147 at 164 per James LJ; Re Bolton; Brown v Bolton (1886) 31 Ch D 542 , CA; Re Shaw; Robinson v Shaw [1894] 2 Ch 573 ; Re Du Bochet; Mansell v Allen [1901] 2 Ch 441 . As to the matters which might be involved in proving the fact of paternity, but which the law does not permit to be inquired into, see Occleston v Fullalove (1874) LR 9 Ch App 147 at 163-4 per James LJ. An ex-nuptial child can, however, be sufficiently identified by reference to its mother: Re Hasties Trusts (1887) 35 Ch D 728 ; In the Estate of Frogley [1905] P 137; Re Loveland; Loveland v Loveland [1906] 1 Ch 542 .5 A child en ventre sa mere is, for this purpose, existing not future: Crook v Hill (1876) 3 Ch D 773 ; Ebbern v Fowler [1909] 1 Ch 578; [1908-10] All ER Rep 673 , CA. The time as at which it needs to be determined whether a child is existing in the case of an inter vivos settlement is the date when the deed becomes effective (Occleston v Fullalove (1874) LR 9 Ch App 147 at 162 per James LJ, at 171 per Mellish LJ, CA; Re Hasties Trusts (1887) 35 Ch D 728 at 734-5 per Stirling J; Ebbern v Fowler [1909] 1 Ch 578; [1908-10] All ER Rep 673 ) and in the case of a will is the date of death of the testator (Occleston v Fullalove (1874) LR 9 Ch App 147; Re Hasties Trusts (1887) 35 Ch D 728 ; Re Loveland; Loveland v Loveland [1906] 1 Ch 542 ).6 Not all provisions in respect of future ex-nuptial children will be held to be conducive to immorality: Re Wyld (1912) SALR 190.7 Blodwell v Edwards (1596) Cro Eliz 509; 78 ER 758 . See also Occleston v Fullalove (1874) LR 9 Ch App 147 at 171, 172 per Mellish LJ; Thompson v Thomas (1891) 27 LR Ir 457. See also Ebbern v Fowler [1909] 1 Ch 578; [1908-10] All ER Rep 673 , CA; Metham v Duke of Devon (1718) 1 P Wms 530; 24 ER 502; Medworth v Pope (1859) 27 Beav 71; 54 ER 28; Hill v Crook (1873) LR 6 HL 265; [1874-80] All ER Rep 62 ; Dorin v Dorin (1875) LR 7 HL 568; [1874-80] All ER Rep 71 ; Re Ayles Trusts (1875) 1 Ch D 282 ; Crook v Hill (1876) 3 Ch D 773 ; Re Bolton; Brown v Bolton (1886) 31 Ch D 542 , CA; Re Harrison; Harrison v Higson [1894] 1 Ch 561 ; Re Du Bochet; Mansell v Allen [1901] 2 Ch 441 .8 Blodwell v Edwards (1596) Cro Eliz 509; 78 ER 758 ; Thompson v Thomas (1891) 27 LR Ir 457. See also Ebbern v Fowler [1909] 1 Ch 578; [1908-10] All ER Rep 673 , CA.9 Occleston v Fullalove (1874) LR 9 Ch App 147, CA; Re Hasties Trusts (1887) 35 Ch D 728 ; In the Estate of Frogley [1905] P 137; Re Loveland; Loveland v Loveland [1906] 1 Ch 542 . The required certainty cannot be achieved by reference to paternity except where the child is referred to as the reputed child of the father. It seems that a child cannot be identified as a reputed child before it is born: Occleston v Fullalove (1874) LR 9 Ch App 147 at 158 per James LJ.10 Re Hasties Trusts (1887) 35 Ch D 728 ; In the Estate of Frogley [1905] P 137; Re Loveland; Loveland v Loveland [1906] 1 Ch 542 .11 (ACT) Parentage Act 2004 s 39(2) (NT) Status of Children Act 1978 s 4(2) (NSW) Status of Children Act 1996 s 6(4) (QLD) Status of Children Act 1978 s 6(2) (SA) Family Relationships Act 1975 s 6(2) (TAS) Status of Children Act 1974 s 3(2)

(VIC) Status of Children Act 1974 s 3(2) (WA) Wills Act 1970 s 30; (WA) Inheritance (Family and Dependants Provision) Act 1972 s 4 (definition of child); (WA) Property Law Act 1969 s 31A(7). See also succession [395-6580]. 12 See family law [205-1490], [205-1495], [205-1520]. The paragraph below is current to 20 April 2012 [430-420] Mixed illegal and legal objects Where a discretion to select between a range of objects, some legal and some illegal, is clearly conferred on the trustee,1 the trust is valid in respect of the legal objects, but exercise of the discretion in favour of any illegal object is invalid.2 Where a fund is given upon a non-discretionary trust for a mixture of legal and illegal objects, without the allocation between them being specified, the whole trust is invalid3 unless the amount applicable to the illegal objects is ascertainable, in which case the trust for the legal objects is valid in respect of the balance of the fund.4 Notes 1 Re Clark; Husband v Martin (1885) 54 LJ Ch 1080.2 Sorresby v Hollins (1740) 9 Mod Rep 221; 88 ER 410; Grimmett v Grimmett (1754) Amb 210; 27 ER 140; Faversham Corp v Ryder (1854) 5 De GM & G 350; 43 ER 905 ; London University v Yarrow (1857) 1 De G & J 72; 44 ER 649 ; Carter v Green (1857) 3 K & J 591; 69 ER 1245; Lewis v Allenby (1870) LR 10 Eq 668; Re Piercy; Whitham v Piercy [1898] 1 Ch 565 , CA (overruling both Johnston v Swann (1818) 3 Madd 457; 56 ER 573 and Baker v Sutton (1836) 1 Keen 224; 48 ER 292 so far as these cases are inconsistent with Lewis v Allenby (1870) LR 10 Eq 668). See also Edmunds v Pickering (1999) 75 SASR 407 at 566 per Lander J (affirmed Pickering v Smoothpool Nominees Pty Ltd (2001) 81 SASR 175 at 193-4; [2001] SASC 387; BC200107893 per Gray J , Full Court).3 Chapman v Brown (1801) 6 Ves 404; 31 ER 1115; Re Birkett (1878) 9 Ch D 576; [1874-80] All ER Rep 224 ; Re Mills Declaration of Trust [1950] 1 All ER 789 (affirmed Re Mills Declaration of Trust [1950] 2 All ER 292 , CA).4 Mitford v Reynolds (1842) 1 Ph 185; 41 ER 602 ; Fisk v A-G (1867) LR 4 Eq 521; Re Williams (1877) 5 Ch D 735 ; Re Birkett (1878) 9 Ch D 576; [1874-80] All ER Rep 224 . The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [430-425] Dispositions voidable for benefit of creditors Under legislation in each State and Territory, a trust, in so far as the trust property is derived from a disposition of property made with intent to defraud creditors of the settlor, is voidable at the instance of any party thereby prejudiced,1 unless it is a disposition to a purchaser in good faith without notice of the intent to defraud.2 It is not necessary for the operation of those provisions that the settlor be bankrupt. Under the (CTH) Bankruptcy Act 1966 (the Act), a transfer, made prior to the transferors bankruptcy, of property which would probably otherwise have been available to the transferors creditors, is voidable by the trustee in bankruptcy, subject to some exceptions, if the main purpose of the transferor was to prevent, hinder or delay the availability of that property for division amongst the transferors creditors.3 For the purposes of that provision a transfer of property includes the payment of money and is also defined in such a way as to be applicable to the making of a declaration of trust.4

Under section 120 of the Act, a transfer of property made in the period beginning five years before the commencement of the transferors bankruptcy and ending on the date of the bankruptcy, is voidable by the trustee in bankruptcy, subject to some exemptions, if the transferee gave no consideration for the transfer or gave consideration of less than the market value of the property.5 Such a transfer is not voidable if it took place more than two years (four years in the case of a transfer to a related entity of the transferor) before the commencement of the bankruptcy and the transferee proves that, at the time of the transfer, the transferor was solvent.6 For the purposes of this provision a transfer of property includes the payment of money and is also defined in such a way as to be applicable to the making of a declaration of trust.7 Where a transfer of property is made on or after the date which is subsequently identified as the date of the commencement of the transferors bankruptcy, then by virtue of the Act the title to the transferred property relates back so as to be vested in the trustee in bankruptcy as from the commencement of the bankruptcy.8 The subsequent occurrence of the bankruptcy therefore establishes that, at the time when the transfer was made the transferor had no title to the relevant property which he or she could pass to the transferee.9 Accordingly, where that transferee is the trustee of a trust or settlement, a purported subsequent transfer of the property by that trustee or by the beneficiaries of that trust or settlement will be ineffective even if the subsequent transferee takes as a purchaser in good faith and for valuable consideration.10 On the other hand, where the transfer to the trustee of the settlement was made before the commencement of the bankruptcy of the transferor, a purchaser in good faith and for valuable consideration from the trustee of the settlement or the beneficiaries could receive an effective title even if the purchase occurred after the commencement of the bankruptcy.11 Notes 1 (ACT) Civil Law (Property) Act 2006 s 239(1) (NT) Law of Property Act 2000 s 208(1) (NSW) Conveyancing Act 1919 s 37A(1) (QLD) Property Law Act 1974 s 228(1) (SA) Law of Property Act 1936 s 86(1) (TAS) Conveyancing and Law of Property Act 1884 s 40(1) (VIC) Property Law Act 1958 s 172(1) (WA) Property Law Act 1969 s 89(1). See bankruptcy [50-865]-[50-875]. 2 (ACT) Civil Law (Property) Act 2006 s 239(2) (NT) Law of Property Act 2000 s 208(3) (NSW) Conveyancing Act 1919 s 37A(3) (QLD) Property Law Act 1974 s 228(3) (SA) Law of Property Act 1936 s 86(2) (TAS) Conveyancing and Law of Property Act 1884 s 40(3)

(VIC) Property Law Act 1958 s 172(3) (WA) Property Law Act 1969 s 89(3). See bankruptcy [50-865]-[50-875]. 3 (CTH) Bankruptcy Act 1966 s 121. See also bankruptcy [50-325], [50-865]-[50-875].4 Ibid s 121(9).5 Ibid s 120. See also bankruptcy [50-325], [50-845]-[50-860].6 Ibid s 120(3). For this purpose, a rebuttable presumption arises that the transferor was insolvent at the time of the transfer if it is established that the transferor: (1) had not, in respect of that time, kept such books, accounts and records as are usual and proper in relation to the business carried on by the transferor and as sufficiently disclose the transferor's business transactions and financial position; or (2) having kept such books, accounts and records, has not preserved them: ibid s 120(3A). 7 Ibid s 120(7).8 Ibid ss 58, 115, 116. See also bankruptcy [50-810].9 Re Gunsbourg [1920] 2 KB 426 at 437-8; [1920] B & CR 50; (1920) 123 LT 353 per Lord Sterndale MR, CA.10 Re Gunsbourg [1920] 2 KB 426 at 446; [1920] B & CR 50; (1920) 123 LT 353 per Warrington LJ , CA.11 Re Hart; Ex parte Green [1912] 3 KB 6; (1912) 107 LT 368 . The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [430-430] Dispositions voidable for benefit of family members A court exercising jurisdiction in proceedings under the (CTH) Family Law Act 1975 (the Act) has the power to declare,1 and the power to alter,2 the rights and entitlements of beneficiaries under a trust. In any such proceedings the court also has power to set aside or restrain the making of an instrument or disposition made or proposed to be made to defeat an existing or anticipated order in those proceedings or which, irrespective of intention, is likely to defeat any such order.3 In proceedings under the Act the court may also make orders with respect to the application for the benefit of all or any of the parties to, and the children of, the marriage, of the whole or any part of the property dealt with by ante-nuptial or post-nuptial settlements made in relation to the marriage.4 There is legislation in each jurisdiction empowering the court to make orders overriding, in the interests of family members and dependants, the will of a testator and any trusts thereby established, or the statutory order of distribution of the estate of an intestate.5 Those powers are extensive but apply only in respect of property forming part of the deceaseds estate remaining after payment of debts and cannot, except in New South Wales, affect property disposed of by the deceased in such a way that the disposal takes effect prior to the death.6 The (NSW) Family Provision Act 1982 (repealed) (repealed by the (NSW) Succession Act 2006) introduced the concept of notional estate and conferred powers on the court which may result in the inclusion in the deceaseds estate for the purposes of that Act of a range of items which would not be included under the corresponding legislation of the other jurisdictions.7 Notes

1 (CTH) Family Law Act 1975 ss 78, 90SL. See family law [205-5010].2 Ibid ss 79, 90SM. See family law [205-5015].3 Ibid s 106B. See family law [205-5195].4 (CTH) Family Law Act 1975 s 85A. See family law [205-5205].5 (ACT) Family Provision Act 1969 (NT) Family Provision Act 1970 (NSW) Succession Act 2006 Ch 3 (QLD) Succession Act 1981 Pt 4 (SA) Inheritance (Family Provision) Act 1972 (TAS) Testators Family Maintenance Act 1912 (VIC) Administration and Probate Act 1958 Pt IV (WA) Inheritance (Family and Dependants Provision) Act 1972. As to family provision generally see succession [395-6500]-[395-7210]. 6 See succession [395-7190]-[395-7210].7 (NSW) Succession Act 2006 Pt 3.3. See succession [395-7205]. The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [430-435] Trusts infringing the rule against perpetuities Under the general law rule against remoteness of vesting, being the principal element in the rule against perpetuities, an interest in property created by way of a trust1 would be void unless it would be certain to vest,2 if at all, not later than 21 years after a relevant life or lives in being at the time of creation of the interest, plus a possible period of gestation.3 Except in South Australia, where that rule has been abolished, 4 it applies in all jurisdictions (but not to superannuation entities)5 but has been fundamentally modified by legislation.6 In those jurisdictions, the rule continues to apply unmodified to trusts taking effect prior to the respective dates specified in the relevant legislation.7 In South Australia the rule has been replaced by provisions giving the court power, if an interest in property has not vested 80 years after the disposition, to vary the terms of the disposition so that the interest vests immediately8 and power to vary the terms of a disposition of property so that interests that cannot vest, or are unlikely to vest, within 80 years after the disposition, will vest within that period.9 The statutory modifications to the rule against remoteness of vesting provide for a perpetuity period of 80 years from the date on which the disposition takes effect, which is mandatory in the Australian Capital Territory and New South Wales,10 but optional in the other jurisdictions.11 Other statutory modifications have introduced: (1) the wait and see principle which preserves the validity of a disposition until it becomes clear that the interest can only vest outside the applicable perpetuity period;12 (2) provision for the reduction of any age specified in an instrument to the extent necessary to

save a disposition from being void for remoteness;13 (3) provision for the exclusion from a class of beneficiaries of any persons being potential members of the class or unborn persons who at birth would become members or potential members of the class (a) in any case where their inclusion prevents the provision for reduction of age from operating to save a disposition from being void for remoteness,14 or (b) unless their exclusion would exhaust the class, in any other case where it is apparent or becomes apparent at a subsequent time that their inclusion would cause the distribution to be treated as void for remoteness.15 The modifying legislation also varies the rule against remoteness of vesting by providing that the creation of an interest which would not by itself be void for remoteness, will not be void by reason only that it is ulterior to and dependent upon an interest which is so void.16 The rule, sometimes referred to as the old rule against perpetuities,17 making void any further limitation of an interest in land, after a life interest to an unborn person, to the issue of that person, has been abolished by statute in all jurisdictions except the Australian Capital Territory and South Australia.18 Another element of the rule against perpetuities is the rule against perpetual trusts under which a trust for non-charitable purposes is void where the duration of the trust will or may exceed the perpetuity period19 or the trust property may be applied for the purposes of the trust after the end of the perpetuity period.20 At common law the applicable perpetuity period would be 21 years after life or lives in being at the creation of the trust or, if no such life were identified expressly or by implication in the instrument creating the trust then 21 years after the creation of the trust.21 However, in most jurisdictions statutory modifications authorise the application of the wait and see principle, which preserves the validity of the settlement until it becomes clear that the settlement must infringe the rule.22 Those statutory modifications also either impose a period of 80 years to the exclusion of the common law period23 or permit its selection as an alternative.24 It is uncertain whether the rule against perpetual trusts applies only to trusts for non-charitable purposes or extends to cases where the gift of income indefinitely is for the benefit of persons, including corporations which are not charities.25 Notes 1 As to the applicability of this principle to charitable trusts see charities [75-500]-[75-525].2 For the purposes of that rule vested means vested in interest not vested in possession: see, for example, Re Earl; Dobson v Earl [1948] NZLR 784 . See also perpetuities and accumulations [310-35].3 See generally perpetuities and accumulations [310-15].4 (SA) Law of Property Act 1936 s 61.5 (CTH) Superannuation Industry (Supervision) Act 1993 s 343. Absent such statutory intervention, the rule would impact upon superannuation funds: Air Jamaica Ltd v Charlton [1999] 1 WLR 1399 at 1408 , PC.6 (ACT) Perpetuities and Accumulations Act 1985 s 3 (in general affecting trusts taking effect on or after 19 December 1985)

(NT) Law of Property Act 2000 ss 4(2) (affecting settlements exercising, after commencement (1 August 1994), powers of appointment), 4(3) (wills executed before, but taking effect after, commencement), 184(1)-(3) (settlements taking effect before or after commencement) (NSW) Perpetuities Act 1984 s 4 (in general affecting settlements taking effect on or after 31 October 1984) (QLD) Property Law Act 1974 Pt 14, s 207 (in general affecting instruments taking effect on or after 1 December 1975); but see also (QLD) Perpetuities and Accumulations Act 1972 (repealed) s 18 (in general affecting instruments taking effect on or after 1 April 1973) (TAS) Perpetuities and Accumulations Act 1992 s 4 (in general affecting wills of persons dying on or after, and instruments executed on or after, 1 December 1992) (VIC) Perpetuities and Accumulations Act 1968 s 3 (in general affecting instruments, and dispositions made otherwise than by any instrument, on or after 10 December 1968) (WA) Property Law Act 1969 Pt XI, s 99 (in general affecting the wills of testators dying after, and other instruments executed after, 6 December 1962). 7 The applicable dates are those stated in note 6 above except that in the case of the (WA) Property Law Act 1969 the applicable date is 7 December 1962, not 6 December 1962.8 (SA) Law of Property Act 1936 s 62(1).9 Ibid s 62(2).10 (ACT) Perpetuities and Accumulations Act 1985 s 8 (NSW) Perpetuities Act 1984 s 7. 11 That is, a shorter period, or a life or lives in being plus 21 years, may be selected: (NT) Law of Property Act 2000 s 187 (if no perpetuity period is specified in the instrument affecting the disposition, the perpetuity period is 80 years) (QLD) Property Law Act 1974 s 209 (if there is no provision in the instrument specifying a perpetuity period or specifying a date on which the disposition must vest, then it appears, in the absence of any express provision in the statute, that the perpetuity period would be determined in accordance with the rule against perpetuities) (TAS) Perpetuities and Accumulations Act 1992 s 6 (if no period is specified in the instrument, the perpetuity period is to be determined by the rule against perpetuities) (VIC) Perpetuities and Accumulations Act 1968 s 5 (if there is no provision in the instrument specifying a perpetuity period or specifying a date on which the disposition must vest, then it appears, in the absence of any express provision in the statute, that the perpetuity period would be determined in accordance with the rule against perpetuities) (WA) Property Law Act 1969 s 101 (if no perpetuity period is specified in the instrument affecting the disposition, the perpetuity period is 80 years). 12 (ACT) Perpetuities and Accumulations Act 1985 s 9 (NT) Law of Property Act 2000 s 190 (NSW) Perpetuities Act 1984 s 8 (QLD) Property Law Act 1974 s 210 (see Nemesis Australia Pty Ltd v FCT (2005) 150 FCR 152; 225 ALR 576; [2005] FCA 1273; BC200506891 at [39]-[48] per Tamberlin J ; Yeomans v Yeomans [2006] 1 Qd R 390; [2005] QSC 85; BC200502239 at [22] per McMurdo J )

(TAS) Perpetuities and Accumulations Act 1992 s 6 (VIC) Perpetuities and Accumulations Act 1968 s 6 (WA) Property Law Act 1969 s 103. 13 (ACT) Perpetuities and Accumulations Act 1985 s 10(1) (NT) Law of Property Act 2000 ss 191(1)-(3), 192 (NSW) Perpetuities Act 1984 ss 9(1)-(3), 10 (QLD) Property Law Act 1974 s 213(1), 213(2) (TAS) Perpetuities and Accumulations Act 1992 s 11(1), 11(2) (VIC) Perpetuities and Accumulations Act 1968 s 9(1), 9(2) (WA) Property Law Act 1969 ss 105, 107(1). 14 (ACT) Perpetuities and Accumulations Act 1985 ss 10(3), 11 (NT) Law of Property Act 2000 ss 191(4), 192 (NSW) Perpetuities Act 1984 ss 9(4), 10 (QLD) Property Law Act 1974 s 213(4) (TAS) Perpetuities and Accumulations Act 1992 s 11(4) (VIC) Perpetuities and Accumulations Act 1968 s 9(4) (WA) Property Law Act 1969 ss 106, 107(2). 15 (ACT) Perpetuities and Accumulations Act 1985 s 10(3) (NT) Law of Property Act 2000 ss 191(4), 192 (NSW) Perpetuities Act 1984 ss 9(4), 10 (QLD) Property Law Act 1974 s 213(3) (TAS) Perpetuities and Accumulations Act 1992 s 11(3) (VIC) Perpetuities and Accumulations Act 1968 s 9(3) (WA) Property Law Act 1969 ss 106, 107(2). 16 (ACT) Perpetuities and Accumulations Act 1985 s 18 (NT) Law of Property Act 2000 s 199 (NSW) Perpetuities Act 1984 s 17 (QLD) Property Law Act 1974 s 215 (TAS) Perpetuities and Accumulations Act 1992 s 12 (VIC) Perpetuities and Accumulations Act 1968 s 11

(WA) Property Law Act 1969 s 109. 17 Also known as the rule in Whitby v Mitchell (1890) 44 Ch D 85; 62 LT 771 against double possibilities.18 (NT) Law of Property Act 2000 s 201 (NSW) Conveyancing Act 1919 s 23A (QLD) Property Law Act 1974 s 216 (TAS) Perpetuities and Accumulations Act 1992 s 21 (VIC) Perpetuities and Accumulations Act 1968 s 12 (WA) Property Law Act 1969 s 114. There are no equivalent provisions in the Australian Capital Territory and South Australia. 19 For the definition of the rule against perpetual trusts see: (ACT) Perpetuities and Accumulations Act 1985 s 2 (NT) Law of Property Act 2000 s 183(1). 20 For the description of the rule see: (QLD) Property Law Act 1974 s 221(1) (TAS) Perpetuities and Accumulations Act 1992 s 18(1) (VIC) Perpetuities and Accumulations Act 1968 s 18(1). 21 See Cadell v Palmer (1833) 1 Cl & Fin 372; 6 ER 956 , HL. See also perpetuities and accumulations [310-25], [310-45].22 (NT) Law of Property Act 2000 s 198(4) (NSW) Perpetuities Act 1984 s 16(3) (QLD) Property Law Act 1974 s 221(2) (TAS) Perpetuities and Accumulations Act 1992 s 18(2) (VIC) Perpetuities and Accumulations Act 1968 s 18(2). In the Australian Capital Territory, the (ACT) Perpetuities and Accumulations Act 1985 s 17(3) is to similar effect but applies only where the term of the trust is determined by reference to the occurrence or non-occurrence of a contingency or contingencies. In Western Australia, there is no express provision in (WA) Property Law Act 1969 Pt XI for modification of the rule against perpetual trusts by application of the wait and see principle (adopted by ibid s 103) and the terms of ibid s 103 leave substantial doubt as to whether they could apply in the circumstances in which that rule would operate. 23 (ACT) Perpetuities and Accumulations Act 1985 s 17(2) (NSW) Perpetuities Act 1984 s 16(2). 24 (NT) Law of Property Act 2000 ss 198(2), 198(3) (QLD) Property Law Act 1974 s 221(2) and as the rule

(TAS) Perpetuities and Accumulations Act 1992 s 18(2) (VIC) Perpetuities and Accumulations Act 1968 s 18(2). In Western Australia, there is no express provision in the (WA) Property Law Act 1969 making the alternative 80 year perpetuity period (provided for in ibid s 101) applicable in respect of perpetual trusts but ibid s 101 itself would appear to have that effect by providing that it is to apply in determining whether any limitation is invalid as infringing the rule against perpetuities. 25 In many cases that uncertainty would be of no significance because the rule of construction that a gift of income indefinitely (otherwise than for charitable purposes) constitutes also a gift of the capital would apply and the rule against perpetual trusts would be irrelevant. However, the question of the relevance of that rule would arise in those cases where the rule of construction is displaced by sufficient indications of the settlors or testators intention that the gift be a gift exclusively of the income. As to class gifts generally see perpetuities and accumulations [310145]-[310-190]. The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [430-440] Trusts for accumulation In all jurisdictions except South Australia, legislation1 provides that where property is disposed of in such a manner that the income may be, or is directed to be, accumulated wholly or in part, the power or direction to accumulate is valid if the disposition of the accumulated income is, or may be, valid, but not otherwise.2 The effect of those provisions is to limit the permissible accumulation period in relation to a trust to the period within which the interests under that trust must vest in order to satisfy the requirements of the applicable rule against perpetuities, as modified by statute.3 The current legislation in each of those jurisdictions provides that nothing in it is to affect any power of a person to terminate an accumulation,4 or any power of a court to maintain or advance out of accumulations, or any power of a trustee under any Act of that jurisdiction or under any instrument creating a trust or making a disposition.5 Earlier legislation applying in those jurisdictions6 has been abrogated or repealed7 and now applies only to trusts taking effect prior to the respective dates designated by the relevant replacement legislation.8 In South Australia, if a disposition provides for the accumulation, or partial accumulation, of income from property over a period that will or may terminate 80 years or more after the date of the disposition, the court may vary the terms of the disposition so that both capital and income will vest within 80 years from the date of the disposition.9 Notes 1 (ACT) Perpetuities and Accumulations Act 1985 s 3 (in general affecting trusts taking effect on or after 19 December 1985) (NT) Law of Property Act 2000 ss 4(2) (affecting settlements exercising, after that commencement (1 August 1994), powers of appointment), 4(3) (wills executed before, but taking effect after, that commencement), 184(1), 184(2), 184(3) (settlements taking effect before or after commencement) (NSW) Perpetuities Act 1984 ss 4, 19 (in general affecting settlements taking effect on or after 31 October 1984) (QLD) Property Law Act 1974 Pt 14, s 207 (in general affecting instruments taking effect on or after 1 December 1975); but see also (QLD) Perpetuities and Accumulations Act 1972

(repealed) s 18 (in general affecting instruments taking effect on or after 1 April 1973) (TAS) Perpetuities and Accumulations Act 1992 s 4 (in general affecting wills of persons dying on or after, and instruments executed on or after, 1 December 1992) (VIC) Perpetuities and Accumulations Act 1968 s 3 (in general affecting instruments, and dispositions made otherwise than by any instrument, on or after 10 December 1968) (WA) Property Law Act 1969 Pt XI, s 99 (in general affecting the wills of persons dying after, and other instruments executed after, 6 December 1962). 2 (ACT) Perpetuities and Accumulations Act 1985 s 19(1) (NT) Law of Property Act 2000 s 202(1) (NSW) Perpetuities Act 1984 s 18(1) (QLD) Property Law Act 1974 s 222(1) (TAS) Perpetuities and Accumulations Act 1992 s 22(1) (VIC) Perpetuities and Accumulations Act 1968 s 19(1) (WA) Property Law Act 1969 s 113(1). 3 See [430-435].4 For example, under the rule in Saunders v Vautier (1841) Cr & Ph 240; [183542] All ER Rep 58; (1841) 10 LJ Ch 354; 41 ER 482 . See [430-2515]. See also perpetuities and accumulations [310-300].5 (ACT) Perpetuities and Accumulations Act 1985 s 19(2) (NT) Law of Property Act 2000 s 202(2) (NSW) Perpetuities Act 1984 s 18(2) (QLD) Property Law Act 1974 s 222(2) (TAS) Perpetuities and Accumulations Act 1992 s 22(2) (VIC) Perpetuities and Accumulations Act 1968 s 19(2) (WA) Property Law Act 1969 s 113(2). 6 In the Australian Capital Territory, the Northern Territory, Queensland, Tasmania and Western Australia, the (IMP) Accumulations Act 1800 (39 & 40 Geo 3 c 98) (often referred to as the Thellusson Act as a result of the decision in Thellusson v Woodford (1799) 4 Ves 227; 31 ER 117 ) applied as an Imperial statute; provisions to similar effect were included in: (NSW) Conveyancing Act 1919 ss 31, 31A, 36 (repealed) (SA) Law of Property Act 1936 ss 60-62 (VIC) Property Law Act 1958 ss 164-166 (repealed). 7 (ACT) Perpetuities and Accumulations Act 1985 s 21 (repealed) (NT) Perpetuities Act 1994 (repealed) s 23 (NSW) Perpetuities Act 1984 s 19 (QLD) Perpetuities and Accumulations Act 1972 (repealed) s 18(3)

(TAS) Perpetuities and Accumulations Act 1992 s 27(1) (VIC) Perpetuities and Accumulations Act 1968 s 20 (WA) Property Law Act 1969 s 113. The corresponding provisions in (SA) Law of Property Act 1936 ss 60-62 have not been repealed. 8 The applicable dates and replacement legislation are those stated in note 1 above except that in the case of the (WA) Property Law Act 1969 the applicable date is 7 December 1962, not 6 December 1962.9 (SA) Law of Property Act 1936 s 62. The paragraph below is current to 20 April 2012 [430-445] Property put into anothers name for an illegal purpose Where X either transfers property to Y without consideration or pays for property which is purchased in the name of Y , with the intention that the beneficial ownership of the property must remain with, or vest in, X, that property is held by Y in trust for X. Even if that trust has not been constituted as an express trust,1 the circumstances will raise a presumption that a resulting trust exists,2 unless X is the husband or a parent3 of Y , or is in loco parentis to Y , in any of which cases there will be a presumption of a gift 4 to Y . Either of those presumptions is rebuttable by evidence of Xs actual intention. 5 If it was also the intention of X, whether or not shared with or known to Y , that either Ys apparent ownership of the property, or the concealment of Xs beneficial ownership, was to be used in association with or in furtherance of an illegal purpose, the trust will be tainted with illegality.6 Both at law and in equity a transaction, even though entered into for an illegal purpose, may have the effect of transferring or creating interests in property.7 That fact does not preclude the transferor from bringing an action to recover the property, but the basic principle is that no court will lend its aid to a person who founds his or her cause of action upon an immoral or an illegal act.8 There are specific exceptions9 to that principle such that a court will not refuse relief where: (1) the claimant was ignorant or mistaken as to the factual circumstances which render an agreement or arrangement illegal;10 (2) the statutory scheme rendering a contract or arrangement illegal was enacted for the benefit of a class of which the claimant is a member;11 (3) an illegal agreement or arrangement was induced by the defendants fraud, oppression or undue influence;12 or (4) the illegal purpose has not been wholly or partly carried into effect.13 Even if none of the specific exceptions applies, the consequence of the illegality of the trust will not necessarily be that the party claiming the beneficial ownership will be precluded from enforcing his or her rights: equity does not support an absolute proposition that the consequence of such illegality is that neither side may obtain relief, so that the matter lies where it falls.14 Furthermore, even the narrower proposition that illegality will preclude a claimant from recovering

the property if he or she needs to rely on the illegality in order to establish his or her claim does not apply to the enforcement of equitable rights.15 Accordingly, the enforceability of a trust affected by illegality does not depend on whether the claimant has the benefit of the presumption of a resulting trust (which could enable the claim to be established without evidence of the illegal purpose) or needs to rebut the presumption of advancement (which would probably not be possible without evidence of the illegal purpose).16 On the other hand, equity will not decide the matter on the basis of a broad judicial discretion to determine whether the granting of relief would affront the public conscience,17 but will apply principles calculated to avoid harsh extremes18 and disproportion between the seriousness of the illegality and the impact which the courts unwillingness to act would have upon the claimant.19 Where the illegality derives from contravention of public policy manifested by statute, the determination as to whether the claimants equitable rights will be recognised or enforced will require identification of the policy or scheme of the statute.20 If the statute discloses an intention to make the rights being claimed unenforceable, or to make unlawful an arrangement that defeats or evades the operation of the statute, there can be no enforceable resulting trust,21 but if such an intention is not disclosed22 the prima facie conclusion is that parliament intended the sanctions and remedies imposed by the statute to be sufficient to deter the conduct at which the statute is directed.23 On that basis the court should not refuse enforcement of the resulting trust unless refusal is essential for achievement of the policy or objects of the statute24 and may impose conditions to ensure that the demands of the underlying policy of the statute are satisfied.25 The impracticability in some instances of imposing appropriate conditions to adjust the claimants rights so as to avoid condoning the illegality may be a sufficient basis for declining to uphold and enforce the resulting trust.26 Notes 1 See [430-210]-[430-340].2 See [430-540].3 Nelson v Nelson (1995) 184 CLR 538; 132 ALR 133; 70 ALJR 47 . See also Brown v Brown (1993) 31 NSWLR 582 , CA(NSW).4 See [430555].5 See [430-550], [430-560].6 Haigh v Kaye (1872) LR 7 Ch App 469; 41 LJ Ch 567; Perpetual Executors and Trustees Assn of Australia Ltd v Wright (1917) 23 CLR 185; [1917] VLR 372; (1917) 23 ALR 177 ; Chettiar v Chettiar [1962] AC 294; [1962] 1 All ER 494; [1962] 2 WLR 548 , PC; Maurice v Lyons [1969] 1 NSWR 307; (1969) 13 FLR 475 ; Sykes v Stratton [1972] 1 NSWLR 145 ; Blackburn v YV Properties Pty Ltd [1980] VR 290; (1979) 44 LGRA 291 ; Tinsley v Milligan [1994] 1 AC 340; [1993] 3 All ER 65; [1993] 3 WLR 126 , HL; Tribe v Tribe [1996] Ch 107; [1995] 4 All ER 236; [1995] 3 WLR 913; (1996) ANZ ConvR 287 (Ext) , CA; Nelson v Nelson (1995) 184 CLR 538; 132 ALR 133; 70 ALJR 47 .7 Payne v McDonald (1908) 6 CLR 208 at 211; 14 ALR 366 per Griffith CJ; Perpetual Executors and Trustees Assn of Australia Ltd v Wright (1917) 23 CLR 185 at 193-4; [1917] VLR 372; (1917) 23 ALR 177 per Barton ACJ; Donaldson v Freeson (1934) 51 CLR 598 at 611 per Gavan Duffy CJ and Starke J, at 616-17 per McTiernan J; 34 SR (NSW) 336; 8 ALJ 65; [1934] ALR 250 ; Martin v Martin (1959) 110 CLR 297 at 305; 33 ALJR 362 . See also Symes v Hughes (1870) LR 9 Eq 475 at 479; 39 LJ Ch 304; 22 LT 462 ; Taylor v Bowers (1876) 1 QBD 291 at 295; [1874-86] All ER Rep 405 per Cockburn CJ ; Re Great Berlin Steamboat Co (1884) 26 Ch D 616 , CA; Tinsley v Milligan [1994] 1 AC 340 at 374; [1993] 3 All ER 65 at 89; [1993] 3 WLR 126 , HL; Tribe v Tribe [1996] Ch 107 at 124; [1995] 4 All ER 236 at 249, 250; [1995] 3 WLR 913 at 928; (1996) ANZ ConvR 287 (Ext) ; Nelson v Nelson (1995) 184 CLR 538 at 577; 132 ALR 133 at 164; 70 ALJR 47 per Dawson J .8 Holman v Johnson (1775) 1 Cowp 341 at 343; [1775-1802] All ER Rep 98; (1775) 98 ER 1120 at 1121 .9 Nelson v Nelson (1995) 184 CLR 538 at 604; 132 ALR 133 at 186; 70 ALJR 47 per McHugh J .10 Oom v Bruce (1810) 12 East 225; 104 ER 87 ; Cowan v Milbourn (1867) LR 2 Ex 230; 16 LT 290; Branigan v Saba [1924] NZLR 481 .11 Kiriri Cotton Co Ltd v Dewani [1960] AC 192; [1960] 1 All ER 177; [1960] 2 WLR 127 , PC. As to legislation being held to be directed to protection of the public generally and not to a particular class see South Australian Cold Stores Ltd v Electricity Trust of South Australia (1965) 115 CLR 247; [1966] ALR 685; (1965) 39 ALJR 332 .12 Clarke v Shee (1774) 1 Cowp 197; 98 ER 1041

; Smith v Cuff (1817) 6 M & S 160; 105 ER 1203 ; Williams v Bayley (1866) LR 1 HL 200; [1861-73] All ER Rep 227; (1866) 14 LT 802; Barclay v Pearson [1893] 2 Ch 154 at 167-8 ; Re Ferguson; Ex parte EN Thorne & Co Pty Ltd (in liq) [1970] ALR 177; (1969) 14 FLR 311 at 316 ; Goodfriend v Goodfriend [1972] SCR 640; (1971) 22 DLR (3d) 699 ; Weston v Beaufils (No 2) (1994) 50 FCR 476; 122 ALR 240 at 266 .13 Symes v Hughes (1870) LR 9 Eq 475; 39 LJ Ch 304; 22 LT 462 ; Taylor v Bowers (1876) 1 QBD 291; [1874-86] All ER Rep 405 ; Re Great Berlin Steamboat Co (1884) 26 Ch D 616 , CA; Hermann v Charlesworth [1905] 2 KB 123; (1905) 93 LT 284 , CA; Petherpermal Chetty v Muniandi Servai (1908) LR 35 Ind App 98; 24 TLR 462 , PC; Payne v McDonald (1908) 6 CLR 208; 14 ALR 366 ; Perpetual Executors and Trustees Assn of Australia Ltd v Wright (1917) 23 CLR 185; [1917] VLR 372; (1917) 23 ALR 177 ; Donaldson v Freeson (1934) 51 CLR 598 at 611 per Gavan Duffy CJ and Starke J, at 616-17 per McTiernan J; 34 SR (NSW) 336; 8 ALJ 65; [1934] ALR 250 ; Martin v Martin (1959) 110 CLR 297 at 305; 33 ALJR 362 ; Rowan v Dann (1991) 64 P & CR 202, CA; Tinsley v Milligan [1994] 1 AC 340 at 374; [1993] 3 All ER 65 at 89; [1993] 3 WLR 126 , HL; Tribe v Tribe [1996] Ch 107 at 124-7; [1995] 4 All ER 236 at 250-2; [1995] 3 WLR 913 at 931; (1996) ANZ ConvR 287 (Ext) ; Nelson v Nelson (1995) 184 CLR 538 at 577; 132 ALR 133 at 164; 70 ALJR 47 per Dawson J ; Leeson v Reichstein [2009] ACTSC 157; BC200910905 at [131], [132] per Harper M . It is a prerequisite for the application of this exception that the property claimed is still in existence in an identifiable form: Taylor v Bowers (1876) 1 QBD 291 at 295 per Cockburn CJ, at 300 per Mellish LJ; [1874-86] All ER Rep 405 ; Sykes v Stratton [1972] 1 NSWLR 145 .14 Nelson v Nelson (1995) 184 CLR 538 at 599 per Deane and Gummow JJ, at 608 per McHugh J; 132 ALR 133 at 149 per Deane and Gummow JJ, at 189 per McHugh J; 70 ALJR 47 .15 Nelson v Nelson (1995) 184 CLR 538 at 557-8 per Deane and Gummow JJ, at 608, 609 per McHugh J; 132 ALR 133 at 148 per Deane and Gummow JJ, at 189 per McHugh J; 70 ALJR 47 .16 Nelson v Nelson (1995) 184 CLR 538 at 557-9 per Deane and Gummow JJ, at 606-10 per McHugh J; 132 ALR 133 at 148-9 per Deane and Gummow JJ, at 187-91 per McHugh J; 70 ALJR 47 . As to the presumption of a resulting trust see [430-540] and as to the presumption of advancement see [430-555].17 Nelson v Nelson (1995) 184 CLR 538 at 611-12; 132 ALR 133 at 191-2; 70 ALJR 47 per McHugh J . For the approach favouring such a discretion see Tinsley v Milligan [1992] Ch 310 at 319, 320 per Nicholls LJ , CA. Compare as to contract law: Saunders v Edwards [1987] 2 All ER 651; [1987] 1 WLR 1116 , CA; Euro-Diam Ltd v Bathurst [1990] 1 QB 1; [1988] 2 All ER 23; [1988] 2 WLR 517 ; Howard v Shirlstar Container Transport Ltd [1990] 3 All ER 366; [1990] 1 WLR 1292 , CA. Compare as to tort law: Pitts v Hunt [1991] 1 QB 24; [1990] 3 All ER 344; [1990] 3 WLR 542 ; Brown v Dunsmuir [1994] 3 NZLR 485 . That approach was also rejected by both the majority and the minority in Tinsley v Milligan [1994] 1 AC 340; [1993] 3 All ER 65; [1993] 3 WLR 126 , HL.18 Nelson v Nelson (1995) 184 CLR 538 at 559 per Deane and Gummow JJ, at 612-13 per McHugh J; 132 ALR 133 at 149 per Deane and Gummow JJ, at 192-3 per McHugh J; 70 ALJR 47 .19 Nelson v Nelson (1995) 184 CLR 538 at 566-7 per Deane and Gummow JJ, at 612-13 per McHugh J; 132 ALR 133 at 155-6 per Deane and Gummow JJ, at 192 per McHugh J; 70 ALJR 47 . Compare Re Torrez 827 F 2d 1299 (1987) at 1301 (9th Cir).20 Nelson v Nelson (1995) 184 CLR 538 at 551-2 per Deane and Gummow JJ, at 613, 616 per McHugh J; 132 ALR 133 at 143-4 per Deane and Gummow JJ, at 193-5 per McHugh J; 70 ALJR 47 ; Koh v Chan (1997) 139 FLR 410 at 428-9 per Murray J , SC(WA). See also Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd (1978) 139 CLR 410; 21 ALR 585; 53 ALJR 1 ; Re Torrez 827 F 2d 1299 (1987) (9th Cir).21 Nelson v Nelson (1995) 184 CLR 538 at 564-5 per Deane and Gummow JJ, at 604 per McHugh J; 132 ALR 133 at 153-4 per Deane and Gummow JJ, at 185 per McHugh J; 70 ALJR 47 . See also Ex parte Yallop (1808) 15 Ves 60 at 66, 67; 33 ER 677 at 680 ; Ex parte Houghton (1810) 17 Ves 251; 34 ER 97 ; Garrett v LEstrange (1911) 13 CLR 430 at 435 ; Preston v Preston [1960] NZLR 385 at 404-5 ; Orr v Ford (1989) 167 CLR 316 at 328; 84 ALR 146; 63 ALJR 198 .22 Worthington v Curtis (1875) 1 Ch D 419 ; Re Torrez 827 F 2d 1299 (1987) at 1302 (9th Cir).23 Nelson v Nelson (1995) 184 CLR 538 at 564-7, 570-1 per Deane and Gummow JJ, at 616-18 per McHugh J; 132 ALR 133 at 154-6, 158-9 per Deane and Gummow JJ, at 194-6 per McHugh J; 70 ALJR 47 . See also Edmunds v Pickering (1999) 75 SASR 407 at 567 per Lander J (affirmed Pickering v Smoothpool Nominees Pty Ltd (2001) 81 SASR 175 at 197; [2001] SASC 387; BC200107893 per Gray J , Full Court); Ikeuchi v Liu (2001) 160 FLR 94 at 110; [2001] QSC

054; BC200100618 .24 Nelson v Nelson (1995) 184 CLR 538 at 616-17; 132 ALR 133 at 1956; 70 ALJR 47 per McHugh J .25 Nelson v Nelson (1995) 184 CLR 538 at 555-6, 571 per Deane and Gummow JJ, at 612-13 per McHugh J; 132 ALR 133 at 146, 159-60 per Deane and Gummow JJ, at 195-6 per McHugh J; 70 ALJR 47 .26 Nelson v Nelson (1995) 184 CLR 538 at 617; 132 ALR 133 at 196; 70 ALJR 47 per McHugh J . See also Chettiar v Chettiar [1962] AC 294; [1962] 1 All ER 494; [1962] 2 WLR 548 , PC.

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(III) Presumed Resulting Trusts The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [430-540] Circumstances in which presumed resulting trust may arise A presumption of resulting trust arises in favour of A where:1 (1) A voluntarily transfers property into the name of B or in their joint names, and B provides no consideration; or (2)

A purchases property in the name of B or in their joint names. In this context, As equitable interest in the property under the resulting trust arises at the moment of the transfer or purchase.2 The presumption of resulting trust is rebuttable by evidence that B was intended to take a beneficial interest.3 No presumption of resulting trust arises if the relationship between A and B raises a presumption that the transfer or purchase was intended as a gift to B (the presumption of advancement).4 The presumption of resulting trust and the presumption of advancement do not limit the courts statutory power to alter property interests on the breakdown of relationships.5 Also, outside of the dissolution of a relationship (for example, for the purposes of insolvency or succession law), in the case of traditional matrimonial relationships, courts are reluctant to intervene through the doctrine of resulting trust to displace the incidents of parties registered title as joint tenants, at least in cases of long marriages.6 Although the presumption of resulting trust has been judicially criticised as being anachronistic and not reflective of modern societal practices,7 there are judicial statements to the effect that the presumption is too entrenched in the law to be easily discarded.8 Notes 1 Calverley v Green (1984) 155 CLR 242 at 246-7 per Gibbs CJ, at 266-7 per Deane J; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 ; Muschinski v Dodds (1985) 160 CLR 583 at 589-90; 62 ALR 429; BC8501051 per Gibbs CJ . See further Russell v Scott (1936) 55 CLR 440 at 449 per Starke J, at 451 per Dixon and Evatt JJ; [1936] ALR 375 ; Noack v Noack [1959] VR 137 at 139; [1959] ALR 389 at 391 per Dean J ; Napier v Public Trustee (WA) (1980) 32 ALR 153 at 158; 55 ALJR 1; 6 Fam LR 238 per Aickin J ; Brown v Wylie (1980) 6 Fam LR 519 at 523 per Powell J , SC(NSW); Bryson v Bryant (1992) 29 NSWLR 188 at 215 per Sheller JA, at 2267 per Samuels AJA; 16 Fam LR 112 , CA(NSW); Callaghan v Callaghan (1995) 64 SASR 396 at 404; BC9503167 per Perry J ; Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669; [1996] 2 All ER 961 at 990; [1996] 2 WLR 802 per Lord Browne-Wilkinson , HL; HCK China Investments Ltd v Solar Honest Ltd (1999) 165 ALR 680 at 727-8 per Hely J . As to the quantum of beneficial interest under a presumed resulting trust see [430-545].2 DKLR Holding Co (No 2) Pty Ltd v Cmr of Stamp Duties (NSW) (1982) 149 CLR 431 at 463-4; 40 ALR 1; [1982] HCA 14; BC8200057 per Aickin J ; Calverley v Green (1984) 155 CLR 242 at 252; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 per Gibbs CJ ; Bryson v Bryant (1992) 29 NSWLR 188 at 227; 16 Fam LR 112 per Samuels AJA , CA(NSW); Clark Drummie & Co v Ryan (1997) 146 DLR (4th) 311.3 Muschinski v Dodds (1985) 160 CLR 583 at 590; 62 ALR 429; BC8501051 per Gibbs CJ . As to the rebuttal of the presumption of resulting trust by evidence of contrary intention see [430-550].4 Muschinski v Dodds (1985) 160 CLR 583 at 590; 62 ALR 429; BC8501051 per Gibbs CJ . As to the presumption of advancement see [430-555]. It is unclear whether the presumption of resulting trust is rebutted or displaced by the presumption of advancement (see, for example, Dunbar v Dunbar [1909] 2 Ch 639 at 645 per Warrington J ; Calverley v Green (1984) 155 CLR 242 at 259; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 per Mason and Brennan JJ ; Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669; [1996] 2 All ER 961 at 990; [1996] 2 WLR 802 per Lord BrowneWilkinson , HL), or whether where there is a relationship which gives rise to the presumption of advancement, no presumption of resulting trust arises unless the presumption of advancement is rebutted (Napier v Public Trustee (WA) (1980) 32 ALR 153 at 158; 55 ALJR 1; 6 Fam LR 238 per Aicken J ; Calverley v Green (1984) 155 CLR 242 at 246 per Gibbs CJ, at 268 per Deane J; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 ; Muschinski v Dodds (1985) 160 CLR 583 at 589-90; 62 ALR 429; BC8501051 per Gibbs CJ ; Nelson v Nelson (1995) 184 CLR 538; 132 ALR 133 at 140; 70 ALJR 47 per Deane and Gummow JJ ). Compare Brown v Brown (1993) 31 NSWLR 582 at 589-90 per Gleeson CJ. As to the rebuttal of the presumption of advancement see [430560].5 These powers are conferred by (CTH) Family Law Act 1975 ss 79 (breakdown of marriage), 90SM (breakdown of de facto relationships). The absence of a referral of power to the

Commonwealth as to de facto relationships in this context by South Australia and Western Australia dictates that the State legislation governing property allocation upon the breakdown of de facto relationships continues exclusive operation in these jurisdictions: (SA) Domestic Partners Property Act 1996 s 11 (WA) Family Court Act 1997 s 205ZG. See family law [205-6205]-[205-6350]. 6 Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278; 224 ALR 280; [2006] HCA 6; BC200600981 , Full Court.7 Calverley v Green (1984) 155 CLR 242 at 264-5 per Murphy J, at 266, 270 per Deane J; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 ; Dullow v Dullow (1985) 3 NSWLR 531 at 535-6 per Hope JA, CA(NSW); Stivactas v Michaletos (No 2) (1993) NSW ConvR 55-683; Nelson v Nelson (1995) 184 CLR 538; 132 ALR 133 at 183-4; 70 ALJR 47 per McHugh J .8 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 364; 30 ALJ 273; BC5600370 per Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ ; Calverley v Green (1984) 155 CLR 242 at 266; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 per Deane J ; Nelson v Nelson (1995) 184 CLR 538; 132 ALR 133 at 141 per Deane and Gummow JJ, at 169 per Toohey J; 70 ALJR 47 . The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [430-545] Quantum of beneficial interest under resulting trust The quantum of a persons beneficial interest under a resulting trust arising out of the purchase of property corresponds to that persons direct financial contribution to the purchase price as a proportion of the total purchase price of the property in question.1 For example, where two or more purchasers contribute to the purchase price of property which is conveyed to them as joint tenants, it is presumed that they hold the legal estate in trust for themselves as tenants in common in shares proportionate to their direct financial contributions2 (unless those contributions are equal, in which case, other than in New South Wales and Queensland,3 the purchasers are presumed to hold the beneficial interest as joint tenants).4 Any other contribution to the property or the relationship between the parties will not alter the quantum of the respective interests under a resulting trust,5 although it may, in an appropriate case, either influence the quantum of beneficial interests under a constructive trust,6 entitle a contributor to an equitable charge,7 or form the basis for an estoppel.8 For the purposes of determining beneficial interests under a resulting trust, the incurring of a legal liability to pay the purchase price, for example, by assuming liability under a mortgage taken out for the purchase of the property in question, constitutes a direct financial contribution to the purchase price of the property.9 However, mortgage repayments are not, for this purpose, taken to be direct financial contributions to the purchase price of the property financed by the mortgage.10 Nor can money expended on improvements to the property alter the beneficial interest of contributors under a resulting trust.11 The preponderance of authority indicates that direct contributions to purchase price in this context include incidental costs of acquisition.12 For the purposes of identifying and quantifying contributions, precise accounting may not necessarily be required, and may on occasion justify a broad brush estimate to ensure that the onus of proof does not itself become an instrument of injustice.13 However, it remains necessary for the court to be in a position of being persuaded that, at the least, a certain amount of contributions were made by one particular party, and to be satisfied as to how those contributions

relate to the contributions made by the other party.14 Notes 1 Calverley v Green (1984) 155 CLR 242 at 246 per Gibbs CJ, at 258 per Mason and Brennan JJ; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 ; Jenkins v Wynen [1992] 1 Qd R 40 at 46 per McPherson SPJ ; National Australia Bank Ltd v Maher [1995] 1 VR 318 at 321 per Fullagar J , CA(VIC).2 Calverley v Green (1984) 155 CLR 242 at 246 per Gibbs CJ, at 258 per Mason and Brennan JJ, at 266 per Deane J; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 . See also Keech v Keech (1938) 55 WN (NSW) 150 ; Ingram v Ingram [1941] VLR 95; [1941] ALR 120 ; Ward v Ward [1958] VR 68; [1958] ALR 216 ; Vedejs v Public Trustee [1985] VR 569 at 574-5 per Nicholson J; Stephenson Nominees Pty Ltd v Official Receiver on behalf of Official Trustee in Bankruptcy; Ex parte Roberts (1987) 16 FCR 536; 76 ALR 485 at 501 per Gummow J; Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449; 82 ALR 530 at 554 per Beaumont J ; Shepherd v Doolan [2005] NSWSC 42; BC200505692 at [20]-[29] per White J .3 In New South Wales and Queensland legislation provides that such purchasers will hold the beneficial interest as tenants in common: (NSW) Conveyancing Act 1919 s 26 (see Delehunt v Carmody (1986) 161 CLR 464 at 472; 68 ALR 253; 61 ALJR 54 per Gibbs CJ ) (QLD) Property Law Act 1974 s 35. 4 Notwithstanding equitys traditional tendency to favour the tenancy in common, in this context equity followed the law: Delehunt v Carmody (1986) 161 CLR 464 at 470-2; 68 ALR 253; 61 ALJR 54 per Gibbs CJ . See also Vedejs v Public Trustee [1985] VR 569 at 575 per Nicholson J.5 But see Midland Bank v Cooke [1995] 4 All ER 562 at 574 per Waite LJ ; Tracy v Bifield (1998) 23 Fam LR 260 at 265 per Tempelman J ; Thornton v Hyde (2004) 32 Fam LR 71; [2004] NSWSC 125; BC200400841 at [13]-[16] per Burchett AJ .6 Calverley v Green (1984) 155 CLR 242 at 263 per Mason and Brennan JJ; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 ; Bryson v Bryant (1992) 29 NSWLR 188 at 219 per Sheller JA, at 227 per Samuels AJA; 16 Fam LR 112 , CA(NSW); Anson v Anson (2004) 12 BPR 22,303; [2004] NSWSC 766; BC200406099 at [37] per Campbell J ; Silvester v Sands [2004] WASC 266; BC200408675 at [106]-[110] per Heenan J ; Sivritas v Sivritas [2008] VSC 374; BC200808514 at [127] per Kyrou J; Australian Building & Technical Solutions Pty Ltd v Boumelhem [2009] NSWSC 460; BC200904847 at [109] per Ward J. Compare Tracy v Bifield (1998) 23 Fam LR 260 at 263 per Tempelman J, SC(WA) . As to constructive trusts see [430-565]-[430-675].7 See [430-650].8 See [430-650].9 Calverley v Green (1984) 155 CLR 242 at 251-2 per Gibbs CJ, at 257-8 per Mason and Brennan JJ, at 267-8 per Deane J; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 ; Daniels v Purcell (2005) 2 DCLR (NSW) 61 .10 Calverley v Green (1984) 155 CLR 242 at 257; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 per Mason and Brennan JJ (purchase price is what is paid in order to acquire the property whereas mortgage instalments are paid to the lender of some or all of the purchase), at 267-8 per Deane J. Compare Bloch v Bloch (1981) 180 CLR 390; 37 ALR 55; 55 ALJR 701 (where the intention of the parties is to acquire the title to the land free of mortgage rather than subject to mortgage, the beneficial interests of the parties are determined by including subsequent mortgage repayments); Bertei v Feher [2000] WASCA 165; BC200003406 at [43], [44] per Wheeler J (who suggested that if: (1) finance is raised that is plainly intended as bridging finance, it is artificial to say that it is the money raised under the mortgage for which, temporarily, both parties may be liable, rather than what is intended to be the ultimate source of funding (say, money from the sale of one partys home) which constitutes the payment of the purchase price; or (2) a relative of one of the parties provides the whole or some of the purchase price as a short term measure until that party is able to obtain funds from, for example, access to a fixed term investment, it seems incorrect to regard that relative as the person making the contribution to the purchase price; leading her Honour to opine that it may be that evidence of the purpose of the mortgage and the expectation which the parties have had about its early discharge from the means of one of them may affect the [legal] position); Chao v Chao (No 3) [2008] NSWSC 1166; BC200809712 at [23] per Brereton J; Sivritas v Sivritas

[2008] VSC 374; BC200808514 at [161] per Kyrou J (who was willing to construe a housing commission terms contract as giving rise to two acquisitions, the second when the legal title is transferred to the purchaser, to which the resulting trust presumption could apply); Barrett v Barrett [2008] BPIR 817; [2009] WTLR 201; [2008] EWHC 1061 (Ch) at [24] per David Richards J (who remarked that contributions may be intended to confer a beneficial interest on the payer if they are referable to an agreement or arrangement made at the time of purchase that the payer should be responsible for the mortgage instalments either on terms that he should have a commensurate beneficial interest or in circumstances from which such an intention can be inferred). Mortgage repayments are, however, relevant for the purposes of equitable accounting between the parties: Calverley v Green (1984) 155 CLR 242 at 253 per Gibbs CJ, at 263 per Mason and Brennan JJ; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 . As to equitable accounting see equity [185-1630]. See also Stack v Dowden [2007] 2 AC 432; [2007] 2 All ER 929; [2007] 2 WLR 831; [2007] UKHL 17 at [34] per Walker LJ (Now that almost all houses and flats are bought with mortgage finance, and the average period of ownership of a residence is a great deal shorter than the contractual term of the mortgage secured on it, the process of buying a house does very often continue, in a real sense, throughout the period of its ownership. The law should recognise that by taking a wide view of what is capable of counting as a contribution towards the acquisition of a residence, while remaining sceptical of the value of alleged improvements that are really insignificant, or elaborate arguments (suggestive of creative accounting) as to how the family finances were arranged).11 Robinson v Robinson [1961] WAR 56 ; Pettitt v Pettitt [1970] AC 777; [1969] 2 All ER 385 , HL; Shepherd v Doolan [2005] NSWSC 42; BC200505692 at [29] per White J ; Scott v Scott [2009] NSWSC 567; BC200905702 at [43] per Ward J .12 Currie v Hamilton [1984] 1 NSWLR 687 at 691 per McLelland J ; Atilgan v Atilgan (unreported, SC(NSW), Austin J, 28 April 1999, BC9902055) at [111]; Black Uhlans Inc v New South Wales Crime Commission (2002) 12 BPR 22,421; [2002] NSWSC 1060; BC200206756 at [144] ; Ryan v Dries (2002) 10 BPR 19,497 at [53]; (2003) ANZ ConvR 47 at 52; [2002] NSWCA 3; BC200200137 per Hodgson JA ; Silvester v Sands [2004] WASC 266; BC200408675 at [40], [41] per Heenan J ; Martech Energy Systems Pty Ltd (in liq) v Bell [2005] VSC 198; BC200505064 at [8] per Hollingworth J ; Chao v Chao (No 3) [2008] NSWSC 1166; BC200809712 at [22] per Brereton J ; Anderson v McPherson (No 2) [2012] WASC 19; BC201200151 at [117] per Edelman J. Compare Little v Little (1988) 15 NSWLR 43 (the purchase price, not the incidental costs, fees, disbursements or the aggregate cost of acquisition, is the relevant amount); Pham v Doan (2005) 63 NSWLR 370; [2005] NSWSC 601; BC200504640 at [7] per Barrett J ; Sivritas v Sivritas [2008] VSC 374; BC200808514 at [126] per Kyrou J .13 Cetojevic v Cetojevic [2006] NSWSC 431; BC200603290 at [36] per Campbell J (affirmed Cetojevic v Cetojevic [2007] NSWCA 33; BC200701029 ).14 Cetojevic v Cetojevic [2006] NSWSC 431; BC200603290 at [36] per Campbell J (affirmed Cetojevic v Cetojevic [2007] NSWCA 33; BC200701029 ). The paragraph below is current to 20 April 2012 [430-550] Rebuttal of presumption of resulting trust by evidence of contrary intention The court will not give effect to a presumption of resulting trust if this is inconsistent with the true intention of the persons upon whose presumed purpose it must depend.1 Hence, the presumption of resulting trust may be rebutted by evidence that, in making a direct financial contribution to the purchase price of property put into the name of another (or in joint names), a person (A) intended that the other (B) should take a beneficial interest.2 If both A and B have so contributed to the purchase price of the property, the intentions of both are material.3 The evidence admissible to establish this intention comprises the acts and declarations of the parties before or at the time of the purchase, or so immediately thereafter as to constitute a part of the transaction.4 Subsequent declarations are admissible only as evidence against the party who made them.5 Although this will commonly require the court to make reasonable inferences from the facts, the court cannot impute to the parties an intention that they did not have.6 Admissible evidence of an intention to gift or loan the property in question will rebut the presumption of resulting trust in relation to that property.7 The testimony of an agent of the parties

involved in the purchase transaction may be relevant for this purpose.8 The presumption of resulting trust will also be rebutted by clear evidence of an intention to create an express trust,9 an express agreement inconsistent with the operation of the presumption,10 or documentary evidence that the transferor intended to divest himself or herself of the beneficial interest in the property.11 Proof of a promise amounting to consideration in respect of the property purchased or transferred may further serve to rebut the presumption.12 Although a party is not, as a general rule, permitted to rely upon his or her own fraud or illegality in order to rebut the presumption of resulting trust,13 this rule is not so rigid as to apply without exception.14 The presumption of resulting trust may be rebutted in part15 or conditionally.16 For example, the admissible evidence may show an intention for a resulting trust to operate until the occurrence of a specified event (such as the death of the transferor, or the transferee) in which case the property must be dealt with pursuant to the express or inferred intention.17 Notes 1 Russell v Scott (1936) 55 CLR 440 at 453-5; [1936] ALR 375 per Dixon and Evatt JJ ; Kauter v Hilton (1953) 90 CLR 86; 27 ALJ 714 ; Palmer v Bank of New South Wales (1975) 133 CLR 150; 7 ALR 671; 50 ALJR 320 ; Public Trustee v Gray-Masters [1977] VR 154 ; Napier v Public Trustee (WA) (1980) 32 ALR 153 at 154-5; 55 ALJR 1; 6 Fam LR 238 per Gibbs CJ; Brown v Wylie (1980) 6 Fam LR 519 at 523 per Powell J (where an express intention be found, there seems to be no room for the operation of the presumed intention which is the basis of cases dealing with a resulting trust); Calverley v Green (1984) 155 CLR 242 at 269; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 per Deane J ; Muschinski v Dodds (1985) 160 CLR 583 at 590 per Gibbs CJ, at 612 per Deane J; 62 ALR 429; BC8501051 ; Bryson v Bryant (1992) 29 NSWLR 188 at 215-16 per Sheller JA, at 227 per Samuels AJA; 16 Fam LR 112 , CA(NSW); Callaghan v Callaghan (1995) 64 SASR 396 at 405; BC9503167 per Perry J; Sorna Pty Ltd v Flint (2000) 21 WAR 563 at 574-5; [2000] WASCA 22; BC200000347 per Murray J ; Sillett v Meek [2009] WTLR 1065; [2007] EWHC 1169 (Ch) at [33]-[35] per Mr Michael Furness QC.2 Stewart Dawson and Co (Victoria) Pty Ltd v FCT (1933) 48 CLR 683 at 689-91 per Dixon J ; Carkeek v Tate-Jones [1971] VR 691 at 695-6 per McInerney J ; McMahon v McMahon [1979] VR 239 ; Muschinski v Dodds (1985) 160 CLR 583 at 590; 62 ALR 429; BC8501051 per Gibbs CJ ; Dullow v Dullow (1985) 3 NSWLR 531 ; Carville v Westbury (1990) 102 FLR 223 ; Killen v Rennie (2003) 48 ACSR 483; [2003] NSWSC 1154; BC200307586 at [16]-[22] per Austin J (reversed on another point Killen v Rennie [2005] NSWCA 392; BC200509758 ).3 Calverley v Green (1984) 155 CLR 242 at 251 per Gibbs CJ, at 258, 261 per Mason and Brennan JJ; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 ; Muschinski v Dodds (1985) 160 CLR 583 at 590; 62 ALR 429; BC8501051 per Gibbs CJ ; Miller v Dudman (2002) DFC 95-256; [2002] WASC 99; BC200202068 at [80] per Hasluck J; Neilson v Letch (No 2) [2006] NSWCA 254; BC200607595 at [30]-[38]per Mason P, with whom McColl and Basten JJA concurred ; Scott v Scott [2009] NSWSC 567; BC200905702 at [54], [55] per Ward J .4 Shephard v Cartwright [1955] AC 431 at 445; [1954] 3 All ER 649 per Viscount Simonds , HL; Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 365; 30 ALJ 273; BC5600370 per Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ ; Pearson v Pearson [1961] VR 693 at 701 per Gavan Duffy, Sholl and Adam JJ ; Brophy v Brophy (1974) 3 ACTR 57 at 60 per Fox J , SC(ACT); Public Trustee v Gray-Masters [1977] VR 154 ; Chapman v Quinlan (1980) FLC 90836; Marcucci v Burns (1984) 9 Fam LR 599 ; Calverley v Green (1984) 155 CLR 242 at 251 per Gibbs CJ, at 262 per Mason and Brennan JJ, at 269-70 per Deane J; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 ; Muschinski v Dodds (1985) 160 CLR 583 at 590 per Gibbs CJ, at 612-13 per Deane J; 62 ALR 429; BC8501051 ; Bryson v Bryant (1992) 29 NSWLR 188 at 215; 16 Fam LR 112 per Sheller JA , CA(NSW); Kokotovich Constructions Pty Ltd v Wallington (1995) 17 ACSR 478 at 485; 13 ACLC 1113 per Kirby ACJ . Compare Little v Saunders [2004] NSWSC 655; BC200404771 at [32] per Campbell J . This restrictive rule has been relaxed in

Canada: Pecore v Pecore (2007) 279 DLR (4th) 513, SC(Canada).5 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 365; 30 ALJ 273; BC5600370 per Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ ; Glynn v Cmr of Stamp Duties [1977] 2 NSWLR 673 at 680 per Reynolds JA , CA(NSW); Muschinski v Dodds (1985) 160 CLR 583 at 590; 62 ALR 429; BC8501051 per Gibbs CJ ; Bryson v Bryant (1992) 29 NSWLR 188 at 215; 16 Fam LR 112 per Sheller JA , CA(NSW); Black Uhlans Inc v New South Wales Crime Commission (2002) 12 BPR 22,421; [2002] NSWSC 1060; BC200206756 at [138] per Campbell J .6 Brophy v Brophy (1974) 3 ACTR 57 at 60 per Fox J , SC(ACT); Allen v Snyder [1977] 2 NSWLR 685 at 694; (1979) FLC 90-656 per Glass JA , CA(NSW); Calverley v Green (1984) 155 CLR 242 at 2612; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 per Mason and Brennan JJ ; Bryson v Bryant (1992) 29 NSWLR 188 at 216; 16 Fam LR 112 per Sheller JA , CA(NSW); National Australia Bank Ltd v Maher [1995] 1 VR 318 at 321 per Fullagar J , CA(VIC).7 Re Hampton [1922] SASR 286 ; National Trustees, Executors & Agency Co of Australasia Ltd v Fenn [1924] SASR 470 ; Russell v Scott (1936) 55 CLR 440; [1936] ALR 375 ; Public Trustee v Gray-Masters [1977] VR 154 ; Brown v Wylie (1980) 6 Fam LR 519 at 523 per Powell J , SC(NSW); Yard v Yardoo Pty Ltd [2007] VSCA 35; BC200701544 at [76] per Nettle JA .8 Muschinski v Dodds (1985) 160 CLR 583 at 591-3 per Gibbs CJ, at 598-9 per Mason J, at 611-12 per Deane J; 62 ALR 429; BC8501051 (where the testimony of both a solicitor involved in the purchase and the parties themselves led the court to conclude that one party intended to confer an immediate and unconditional beneficial interest on the other party).9 Compare Crampton-Smith v CramptonSmith [2012] 1 NZLR 5; [2011] NZCA 308 at [44] per Randerson J (remarking that where there is evidence of an actual intention to create a trust, then there is generally no need to rely on any presumed intention and vice versa, but that in a case where the presumed intention coincides with the actual intention of the party contributing the funds, then, in our view, each may be considered as supporting the other).10 Gough v Fraser [1977] 1 NZLR 279 at 283 per Richmond P; Knezevic v Knezevic (1986) 3 BPR 9505 ; Brennan v Duncan [2006] NSWSC 674; BC200605590 at [22]-[30] per White J ; Sivritas v Sivritas [2008] VSC 374; BC200808514 at [147], [148] per Kyrou J.11 Valoutin Pty Ltd v Furst (1998) 154 ALR 119 at 132 per Finkelstein J .12 Re Bulankoff [1986] 1 Qd R 366 (promise to help work on a farm excluded the operation of the presumption of resulting trust in relation to the farm). See also Luke v Waite (1905) 2 CLR 252; 11 ALR 107 ; House v Caffyn [1922] VLR 67 per Cussen J ; Newcastle City Council v Kern Land Pty Ltd (1997) 42 NSWLR 273 at 280 per Windeyer J ; Valoutin Pty Ltd v Furst (1998) 154 ALR 119 at 132 per Finkelstein J .13 Tinsley v Milligan [1994] 1 AC 340; [1993] 3 All ER 65 at 82; [1993] 3 WLR 126 per Lord Jauncey , HL; Weston v Beaufils (No 2) (1994) 50 FCR 476; 122 ALR 240 at 261-6 per Hill J .14 The flexible approach was heralded by decision of the High Court of Australia in Nelson v Nelson (1995) 184 CLR 538; 132 ALR 133; 70 ALJR 47 : see [430-445].15 Russell v Scott (1936) 55 CLR 440; [1936] ALR 375 ; Re Kerrigan; Ex parte Jones (1946) 47 SR (NSW) 76 at 82-3 per Jordan CJ (but see Dullow v Dullow (1985) 3 NSWLR 531 at 540) ; Kauter v Hilton (1953) 90 CLR 86 at 100; 27 ALJ 714 per Dixon CJ, Williams and Fullagar JJ ; Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 367; 30 ALJ 273; BC5600370 per Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ ; Hann v Linton (unreported, SC(SA), Bray CJ, 24 July 1967) noted (1968) 42 ALJ 317; Napier v Public Trustee (WA) (1980) 32 ALR 153 at 158; 55 ALJR 1; 6 Fam LR 238 per Aickin J .16 Jobson v Beckingham (1983) 9 Fam LR 169 (the presumption of advancement being conditional upon the marriage taking place, and as such, the presumption of resulting trust would operate if the marriage did not take place).17 Russell v Scott (1936) 55 CLR 440; [1936] ALR 375 ; Re Kerrigan; Ex parte Jones (1946) 47 SR (NSW) 76 (presumption rebutted as to a life interest but not in respect of the interest in remainder); Napier v Public Trustee (WA) (1980) 32 ALR 153 at 160; 55 ALJR 1; 6 Fam LR 238 per Aickin J (evidence established that the transfer by a man of property to his de facto spouse was on the understanding that the property was to revert to his estate upon the death of the spouse, held that the presumption of resulting trust was rebutted in respect of the life interest in the spouse).

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(IV) The Presumption of Advancement The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [430-555] Presumption of advancement If the relationship between the parties to a transaction which would ordinarily give rise to the presumption of resulting trust1 is such that the transferor has a natural obligation to provide for the transferee, equity presumes that, subject to contrary intention,2 the transferor intended the transfer to operate by way of advancement or gift (the presumption of advancement).3 The presumption of advancement applies with respect to transfers from: (1) husband to wife4 (but not including de facto wife);5 (2) man to fiance;6 (3) parent to child7 (including an illegitimate8 or adopted child,9 but not a step-child10 or the spouse of a child);11

(4) persons equity treats as being in loco parentis12 to the transferee.13 A transfer from wife to husband has not historically attracted the presumption of advancement on the basis of an absence of a natural obligation to provide,14 although this may be queried in modern society.15 There is no presumption of advancement where the purchaser acts as trustee of a discretionary trust the beneficiaries of which include the purchasers spouse or child,16 or where the purchase is in the name of a company controlled by a wife or child.17 The presumption of advancement does not limit the courts discretionary power to alter property interests on the breakdown of marriage or a de facto relationship.18 Although the presumption of advancement has been judicially criticised as anachronistic and not reflective of modern societal practices,19 there are judicial statements to the effect that the presumption is too entrenched in the law to be easily discarded.20 Notes 1 As to transactions which give rise to the presumption of resulting trust see [430-540].2 As to the rebuttal of the presumption of advancement by contrary intention see [430-550].3 Murless v Franklin (1818) 1 Swan 13 at 17; 36 ER 278 at 280 per Lord Eldon ; Sidmouth v Sidmouth (1840) 2 Beav 447 at 454; [1835-42] All ER Rep 339; (1840) 9 LJ Ch 282; 48 ER 1254 at 1257 per Lord Langdale MR; Bennet v Bennet (1879) 10 Ch D 474 at 476-8 per Jessel MR; Standing v Bowring (1885) 31 Ch D 282; [1881-85] All ER Rep 702 ; Dunbar v Dunbar [1909] 2 Ch 639 at 645 per Warrington J ; Scott v Pauly (1917) 24 CLR 274 at 282; 24 ALR 27 per Isaacs J; Crichton v Crichton (1930) 43 CLR 536; 4 ALJ 170 ; Drever v Drever [1936] ALR 446; (1936) 10 ALJ 207 ; Re Kerrigan; Ex parte Jones (1946) 47 SR (NSW) 76 ; Shephard v Cartwright [1955] AC 431; [1954] 3 All ER 649 ; Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 364; 30 ALJ 273; BC5600370 per Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ ; Glynn v Cmr of Stamp Duties [1977] 2 NSWLR 673 at 680 per Reynolds JA , CA(NSW); Napier v Public Trustee (WA) (1980) 32 ALR 153 at 158; 55 ALJR 1; 6 Fam LR 238 per Aickin J ; Calverley v Green (1984) 155 CLR 242 at 247-8 per Gibbs CJ, at 268 per Deane J; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 ; Muschinski v Dodds (1985) 160 CLR 583 at 58990; 62 ALR 429; BC8501051 per Gibbs CJ ; Brown v Brown (1993) 31 NSWLR 582 at 589-90 per Gleeson CJ ; Nelson v Nelson (1995) 184 CLR 538; 132 ALR 133 at 140 per Deane and Gummow JJ, at 182-3 per McHugh J; 70 ALJR 47 ; Callaghan v Callaghan (1995) 64 SASR 396 at 404; BC9503167 per Perry J . As to the relationship between the presumption of resulting trust and the presumption of advancement see Martin v Martin (1959) 110 CLR 297 at 303; 33 ALJR 362 (It is called a presumption of advancement but it is rather the absence of any reason for assuming that a trust arose); Calverley v Green (1984) 155 CLR 242 at 250; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 per Gibbs CJ (The presumption of advancement should be held to be raised when the relationship between the parties is such that it is more probable than not that a beneficial interest was intended to be conferred, whether or not the purchaser owed the other a legal or moral duty of support), at (CLR) 267 per Deane J (presumption of advancement is not strictly a presumption at all, but simply a recognition that there are certain relationships in which equity infers that any benefit has been provided by way of advancement); Sharrment Pty Ltd v Official Trustee in Bankruptcy (1988) 18 FCR 449; 82 ALR 530 at 554 per Beaumont J ; Nelson v Nelson (1995) 184 CLR 538; 132 ALR 133 at 140; 70 ALJR 47 per Deane and Gummow JJ ; Koh v Chan (1997) 139 FLR 410 at 422 per Murray J , SC(WA) (presumption of advancement is no more than a series of evidentiary assumptions or inferences).4 Sheppard v Penglase (1892) 18 VLR 180 ; Russell v Scott (1936) 55 CLR 440 at 451-3; [1936] ALR 375 per Dixon and Evatt JJ ; March v March (1945) 62 WN (NSW) 111 ; Moate v Moate [1948] 2 All ER 486 ; Schubert v Schubert (1949) 66 WN (NSW) 173 ; Wirth v Wirth (1956) 98 CLR 228 at 232 per Dixon CJ; Martin v Martin (1959) 110 CLR 297; 33 ALJR 362 ; Noack v Noack [1959] VR 137; [1959] ALR 389 ; Pearson v Pearson [1961] VR 693 ;

Hepworth v Hepworth (1963) 110 CLR 309 at 318 per Windeyer J ; Doohan v Nelson [1973] 2 NSWLR 320 at 325 per Mahoney J ; Allen v Snyder [1977] 2 NSWLR 685; (1979) FLC 90-656 , CA(NSW); Calverley v Green (1984) 155 CLR 242 at 256; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 per Mason and Brennan JJ . The presumption of advancement will not be displaced simply because the marriage is subsequently dissolved, although a transfer occurring after separation will not attract the presumption: Blinkco v Blinkco [1964-65] NSWR 20; Wilson v Wilson [1963] 2 All ER 447 at 454 per Russell LJ . It cannot be assumed that the presumption of advancement will be easily applied in this respect to rebut any presumption of resulting trust in relation to household goods purchased for the use and enjoyment of both husband and wife (see Silver v Silver [1958] 1 All ER 523 at 528; [1958] 1 WLR 259 at 265 per Parker LJ ; Ebner v Official Trustee in Bankruptcy (2003) 126 FCR 281; 196 ALR 533 at 540; [2003] FCA 73; BC200300253 per Finkelstein J ), or in relation to goods purchased from funds in a credit card account established by the husband which the wife was authorised to use (see Ebner v Official Trustee in Bankruptcy, above at (ALR) 540-2 per Finkelstein J). The position may, however, be different where the wife uses funds from a joint bank account: Jones v Maynard [1951] Ch 572 at 575; [1951] 1 All ER 802 per Vaisey J ; Re Bishop [1965] Ch 450 at 456; [1965] 1 All ER 249 per Stamp J (applied In the matter of the bankrupt estate of Reid; Clark v Reid (1998) 85 FCR 452; BC9803695 ).5 Calverley v Green (1984) 155 CLR 242 at 259-61 per Mason and Brennan JJ, at 268-9 per Deane J; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 (on the basis that de facto parties cannot be assumed to have intended the same consequences as parties entering a formal marriage); Wirth v Wirth (1956) 98 CLR 228 at 231-2 per Dixon CJ ; Hepworth v Hepworth (1963) 110 CLR 309 at 317 per Windeyer J ; Cavalier v Cavalier (1971) 19 FLR 199 ; Carkeek v Tate-Jones [1971] VR 691 at 695-6 per McInerney J ; Allen v Snyder [1977] 2 NSWLR 685 at 690; (1979) FLC 90-656 per Glass JA , CA(NSW); Napier v Public Trustee (WA) (1980) 32 ALR 153 at 154 per Gibbs CJ, at 158 per Aickin J; 55 ALJR 1; 6 Fam LR 238 ; Atkinson v Burt (1989) 12 Fam LR 800 ; Jenkins v Wynen [1992] 1 Qd R 40 at 47 per McPherson SPJ ; Little v Saunders [2004] NSWSC 655; BC200404771 at [30] per Campbell J ; Silvester v Sands [2004] WASC 266; BC200408675 at [38] per Heenan J ; Vella v Mineo [2005] NSWSC 1149; BC200510247 at [103] per Hall J ; Brennan v Duncan [2006] NSWSC 674; BC200605590 at [10] per White J. The increasing acceptance of de facto relationships in society, evidenced in part by their legislative recognition in most jurisdictions (see family law), may see a change in this view in future: see, for example Calverley v Green (1984) 155 CLR 242 at 250-1; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 per Gibbs CJ (it seems natural to conclude that a man who puts property in the name of a woman with whom he or she is living in a de facto relationship does so because he or she intends her to have a beneficial interest, and that the presumption of advancement is raised). See also Murdock v Aherne (1878) 4 VLR (E) 244 at 249 ; Carkeek v Tate-Jones [1971] VR 691 at 695-6 per McInerney J .6 Moate v Moate [1948] 2 All ER 486 ; Wirth v Wirth (1956) 98 CLR 228 at 237-8 per Dixon CJ ; Jenkins v Wynen [1992] 1 Qd R 40 at 46-7 per McPherson SPJ ; Tayles v Davis (2009) 3 ASTLR 222; [2009] VSCA 304; BC200911421 at [40], [41] per Neave JA. A resulting trust arises if the marriage does not take place: Davies v Messner (1975) 12 SASR 333 ; Jobson v Beckingham (1983) 9 Fam LR 169 ; Jenkins v Wynen [1992] 1 Qd R 40 at 46-7 per McPherson SPJ ; Bertei v Feher [2000] WASCA 165; BC200003406 at [14] per Kennedy J ; Nguyen v Scheiff (2003) DFC 95-276; [2003] NSWSC 253; BC200301734 at [58], [59] per Berecry AM . An alternative analysis is that of the failure of a conditional gift if the condition is not fulfilled: Cohen v Sellar [1926] 1 KB 536 ; Kais v Turvey (1994) 11 WAR 357; 17 Fam LR 498 at 499-500 per Malcolm CJ, at 504 per Ipp J ; Bertei v Feher [2000] WASCA 165; BC200003406 at [14] .7 Historically the presumption of advancement was limited to transfers from father to child: Bennet v Bennet (1879) 10 Ch D 474 ; Cain v Watson (1890) 16 VLR 88 ; Cousins v Peters (1900) 17 WN (NSW) 61 ; Davies v National Trustees, Executors and Agency Co of Australasia Ltd [1912] VLR 397 ; Scott v Pauly (1917) 24 CLR 274 at 281-2; 24 ALR 27 per Isaacs J; Re Boag (1920) 16 Tas LR 1 ; Kerr v West Australian Trustee Executor & Agency Co Ltd (1937) 39 WALR 34 ; Schubert v Schubert (1949) 66 WN (NSW) 173 ; Shephard v Cartwright [1955] AC 431; [1954] 3 All ER 649 ; Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 364; 30 ALJ 273; BC5600370 per Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ . However, it now also applies with respect to transfers from mother to child: Brown v Brown (1993) 31 NSWLR

582 at 598-9 per Kirby P ; Nelson v Nelson (1995) 184 CLR 538; 132 ALR 133 at 141 per Deane and Gummow JJ, at 162-3 per Dawson J; 70 ALJR 47 (noting that the (CTH) Family Law Act 1975 imposes upon both parents the primary duty to maintain the child: ibid s 66A(2)(b)), (ALR) at 169-71 per Toohey J (also making reference to the (CTH) Family Law Act 1975), at (ALR) 183-4 per McHugh J; Tanumihardjo v FCT (1997) 36 ATR 400 at 403-4 per Heerey J. That the child is of age, has independent means or is otherwise self-supporting will not prevent the presumption of advancement from arising (Callaghan v Callaghan (1995) 64 SASR 396 at 405; BC9503167 per Perry J; Paulet v Stewart [2009] VSC 60; BC200900991 at [286] per Habersberger J ) although it has the capacity to reduce the weight to be accorded to it: Laksar v Laksar [2008] 1 WLR 2675 at [20] per Lord Neuberger . Conversely, the Supreme Court of Canada has ruled that the presumption of advancement should not apply in respect of adult children: Pecore v Pecore (2007) 279 DLR (4th) 513. The presumption of advancement also operates with respect to a transfer of property effected in the joint names of a child and a third party: Kilpin v Kilpin (1834) 1 My & K 520 at 542; 39 ER 777 at 786 per Brougham LC .8 Soar v Foster (1858) 4 K & J 152 at 160; 70 ER 64 at 67 per Page Wood VC ; Tucker v Burrow (1865) 2 Hem & M 515 at 525; 71 ER 563 at 567 per Page Wood VC ; National Trustees, Executors & Agency Co of Australasia Ltd v Fenn [1924] SASR 470 at 477 per Murray CJ . The status of children legislation in each jurisdiction (see family law), in recognising the rights of illegitimate children, supports the application of the presumption of advancement in these cases.9 This is supported by the adoption legislation in each jurisdiction which operates to treat adopted children as the child of the adopters: see family law.10 Re Bulankoff [1986] 1 Qd R 366 .11 Yoshino v Niddrie [2003] NSWSC 57; BC200300293 at [45] per Young CJ in Eq; Z v Z (2005) 34 Fam LR 296; (2005) FLC 93-241; [2005] FamCA 996 at [145] per Coleman and Boland JJ; Anderson v McPherson (No 2) [2012] WASC 19; BC201200151 at [143] per Edelman J.12 In loco parentis means in the place of a parent: Encyclopaedic Australian Legal Dictionary (definition of in loco parentis).13 Re Paradise Motor Co Ltd [1968] 2 All ER 625; [1968] 1 WLR 1125 at 1139-40 per Danckwerts LJ , CA; Calverley v Green (1984) 155 CLR 242 at 247; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 per Gibbs CJ .14 Mercier v Mercier [1903] 2 Ch 98 ; Moore v Whyte (No 2) (1922) 22 SR (NSW) 570; 39 WN (NSW) 194 ; March v March (1945) 62 WN (NSW) 111 ; Robinson v Robinson [1961] WAR 56 ; Brophy v Brophy (1974) 3 ACTR 57 at 60 per Fox J , SC(ACT); Brown v Wylie (1980) 6 Fam LR 519 at 523 per Powell J , SC(NSW); Muschinski v Dodds (1985) 160 CLR 583 at 590; 62 ALR 429; BC8501051 per Gibbs CJ ; Trustees of the Property of Cummins (a bankrupt) v Cummins (2006) 227 CLR 278; 224 ALR 280; [2006] HCA 6; BC200600981 at [44], [45] , Full Court; Scott v Scott [2009] NSWSC 567; BC200905702 at [44], [45] per Ward J .15 See Calverley v Green (1984) 155 CLR 242 at 268; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 per Deane J (where his Honour expressed concern that the presumption of advancement should be adjusted to reflect modern concepts of the equality in status and obligations of a wife vis--vis a husband).16 Andrew (as trustee for the estate of Ward (decd)) v Zant Pty Ltd (rec and mgr apptd) (2004) 213 ALR 812; [2004] FCA 1716; BC200409334 at [20] per Hill J .17 Peters v Lithgow Forge Pty Ltd [2011] NSWSC 1185; BC201107782 at [139], [141] per Slattery J.18 These powers are conferred by (CTH) Family Law Act 1975 ss 79 (breakdown of marriage), 90SM (breakdown of de facto relationships). The absence of a referral of power to the Commonwealth as to de facto relationships in this context by South Australia and Western Australia dictates that the State legislation governing property allocation upon the breakdown of de facto relationships continues exclusive operation in these jurisdictions: (SA) Domestic Partners Property Act 1996 s 11 (WA) Family Court Act 1997 s 205ZG. See family law [205-6205]-[205-6350]. 19 Falconer v Falconer [1970] 1 WLR 1333 at 1336 per Lord Denning MR ; Pettitt v Pettitt [1970] AC 777 at 793 per Lord Reid, at 802 per Lord Morris, at 811 per Lord Hodson, at 823-4 per Lord Diplock; [1969] 2 All ER 385 ; Gissing v Gissing [1971] AC 886 at 907; [1970] 2 All ER 781 per Lord Diplock ; Calverley v Green (1984) 155 CLR 242 at 265 per Murphy J, at 266,

270 per Deane J; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 ; Dullow v Dullow (1985) 3 NSWLR 531 at 535-6 per Hope JA, CA(NSW); Stivactas v Michaletos (No 2) (1993) NSW ConvR 55683; Nelson v Nelson (1995) 184 CLR 538; 132 ALR 133 at 183-4; 70 ALJR 47 per McHugh J .20 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 364; 30 ALJ 273; BC5600370 per Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ ; Calverley v Green (1984) 155 CLR 242 at 266; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 per Deane J ; Nelson v Nelson (1995) 184 CLR 538; 132 ALR 133 at 140 per Deane and Gummow JJ, at 169 per Toohey J; 70 ALJR 47 . The paragraph below is current to 20 April 2012 [430-560] Rebuttal of the presumption of advancement The presumption of advancement 1 may be rebutted (possibly partially)2 by admissible evidence that no gift was intended by the transferor.3 The onus of rebutting the presumption of advancement lies upon the person alleging the existence of a resulting (or express) trust.4 Admissible evidence for this purpose include the instrument pursuant to which title is transferred, and the acts and declarations of the parties before or at the time of the relevant transaction, or so immediately thereafter as to constitute a part of the transaction.5 Subsequent acts and declarations are only admissible as evidence against the party who made them.6 Although the general principle is that a party is not permitted to rely upon his or her own fraud or illegality in order to rebut the presumption of advancement,7 this principle is not so rigid as to apply without exception.8 Admissible evidence that the transferor has reserved a life interest in the property the subject of the purchase or transfer,9 that the transfer was motivated for reasons inconsistent with an intention to confer beneficial ownership,10 or that the transferee was intended to perform counterobligations in relation to the property transferred,11 will rebut the presumption of advancement. The mere retention of title documents to the property transferred by the transferor is not of itself sufficient to rebut the presumption of advancement because it can be motivated for reasons unrelated to an intention to retain beneficial ownership in the property transferred.12 If, in a given case, the presumption of advancement is rebutted, then the basic presumption of resulting trust applies.13 Notes 1 As to the presumption of advancement see [430-555].2 The balance of authority would appear to be against the proposition that the presumption of advancement can be rebutted partially (such as, for example, where the donor intends to retain a life interest): Forrest v Forrest (1865) 11 Jur NS 317; McKie v McKie (1898) 23 VLR 489 ; Callaghan v Callaghan (1995) 64 SASR 396 at 406; BC9503167 per Perry J. But see Re Kerrigan; Ex parte Jones (1946) 47 SR (NSW) 76 at 81-3 ; Hann v Linton (unreported, SC(SA), Bray CJ, 24 July 1967) noted (1968) 42 ALJ 317 (presumption of advancement of a one third interest in partnership property arose in favour of the wife against the mother but not the husband; rebutted by actual intention). Compare Wood v Wood [1956] VLR 478 at 486-7 per Smith J. Although it has been suggested that, in cases in which there has been a gift with a reservation of a life interest in the donor a species of estoppel may arise in recognition of the fact that it would be inequitable to allow the donee to take the benefit of the gift without acknowledging the reserved interest (see Baker v Baker (1993) 2 FLR 247, CA; Callaghan v Callaghan (1995) 64 SASR 396 at 406-7; BC9503167 per Perry J), it is more likely that Australian courts would deal with such an issue by the imposition of constructive trusteeship on the grounds of unconscionable conduct: see [430-620].3 Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 364-5; 30 ALJ 273; BC5600370 per Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ ; Calverley v Green (1984) 155 CLR 242 at 251; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 per Gibbs CJ ; Nelson v Nelson (1995) 184 CLR 538; 132 ALR 133 at 140 per Deane and Gummow JJ, at 161 per Dawson J, at 171 per Toohey J; 70 ALJR 47 ; Callaghan v Callaghan (1995) 64 SASR 396 at 405; BC9503167 per Perry J ; Singh v Singh (2004) 31 Fam LR 242; (2004) DFC 95-280; [2004] NSWSC 109; BC200400726 at [14]

per Barrett J .4 Martin v Martin (1959) 110 CLR 297; 33 ALJR 362 ; Calverley v Green (1984) 155 CLR 242 at 252 per Gibbs CJ, at 262 per Mason and Brennan JJ, at 269-70 per Deane J; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 .5 Murless v Franklin (1818) 1 Swan 13 at 19; 36 ER 278 at 280 per Lord Eldon; Shephard v Cartwright [1955] AC 431 at 445-6; [1954] 3 All ER 649 per Viscount Simonds , HL; Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 365; 30 ALJ 273; BC5600370 per Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ ; Glynn v Cmr of Stamp Duties [1977] 2 NSWLR 673 at 680 per Reynolds JA, CA(NSW); Damberg v Damberg (2001) 52 NSWLR 492; [2001] NSWCA 87; BC200102714 at [36]-[92] per Heydon JA ; Singh v Singh (2004) 31 Fam LR 242; (2004) DFC 95-280; [2004] NSWSC 109; BC200400726 at [15] per Barrett J ; Wilkins v Wilkins [2007] VSC 100; BC200702483 at [15] per Kaye J . Compare Australian Building & Technical Solutions Pty Ltd v Boumelhem [2009] NSWSC 460; BC200904847 at [133] per Ward J .6 Shephard v Cartwright [1955] AC 431 at 445-6; [1954] 3 All ER 649 per Viscount Simonds, HL; Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 366; 30 ALJ 273; BC5600370 per Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ; Glynn v Cmr of Stamp Duties [1977] 2 NSWLR 673 at 680 per Reynolds JA , CA(NSW); Wilkins v Wilkins [2007] VSC 100; BC200702483 at [15] per Kaye J . For example, evidence of the donors change of mind subsequent to the transfer, or of the donors subsequent dealings with the property transferred which are inconsistent with the presumption of advancement are inadmissible to rebut the presumption: Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 365-6; 30 ALJ 273; BC5600370 per Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ ; Glynn v Cmr of Stamp Duties [1977] 2 NSWLR 673 .7 Tinsley v Milligan [1994] 1 AC 340; [1993] 3 All ER 65 at 82; [1993] 3 WLR 126 per Lord Jauncey , HL; Weston v Beaufils (No 2) (1994) 50 FCR 476; 122 ALR 240 at 261-6 per Hill J .8 The flexible approach was heralded by the decision of the High Court of Australia in Nelson v Nelson (1995) 184 CLR 538; 132 ALR 133; 70 ALJR 47 : see [430-445].9 McKie v McKie (1898) 23 VLR 489 ; Stuckey v Trustees Executors and Agency Co Ltd [1910] VLR 55 ; Millard v Lucas [1936] SASR 166 .10 Calverley v Green (1984) 155 CLR 242; 56 ALR 483; 59 ALJR 111; 9 Fam LR 940 ; Rix v Mahony [2009] NSWSC 675; BC200906592 .11 Smith v Smith [2007] NTSC 31; BC200705516 at [29] per Mildren J ; Peterson v Hottes [2012] QSC 50; BC201201408 at [65], [66] per Mullins J (presumption of advancement rebutted by evidence that the payment in question was in the nature of a conditional gift).12 The retention of title may be, for example, for the purpose of safe keeping, or it may be indicative of the transferors intention to grant the transferee a defeasible beneficial interest through the retention of the power of revocation: Charles Marshall Pty Ltd v Grimsley (1956) 95 CLR 353 at 366-7; 30 ALJ 273; BC5600370 per Dixon CJ, McTiernan, Williams, Fullagar and Taylor JJ .13 Brown v Brown (1993) 31 NSWLR 582 at 589 per Gleeson CJ ; Nelson v Nelson (1995) 184 CLR 538; 132 ALR 133 at 140; 70 ALJR 47 per Deane and Gummow JJ ; National Australia Bank Ltd v Maher [1995] 1 VR 318 at 321 per Fullagar J , CA(VIC).

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(II) Statutory Jurisdiction to Authorise Variation of Trust (A) Expediency Jurisdiction The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [430-5120] Prerequisites for statutory jurisdiction In all jurisdictions except the Northern Territory trustee legislation provides that, where in the management or administration1 of any property vested2 in trustees,3 any sale, lease, mortgage, surrender, release, disposition, purchase, investment, acquisition, expenditure4 or transaction5 is, in the opinion of the court, expedient6 (or in Queensland and Western Australia, would be in the best interests of the persons, or the majority of persons, beneficially interested under the trust),7 but the same cannot be effected by reason of the absence of any power for that purpose vested in the trustees by the trust instrument or by law,8 (or in Queensland and Western Australia, it is inexpedient or difficult or impracticable to effect without the assistance of the court),9 the court may:10 (1) by order confer upon the trustees, either generally or in any particular instance, the necessary power for the purpose, on such terms, and subject to such provisions and conditions (and, in the Australian Capital Territory and New South Wales, including adjustment of the respective rights of the beneficiaries)11 as the court may think fit; and (2) direct in what manner any money authorised to be expended, and the costs of any transaction, are to be paid or borne as between capital and income.12 The court may from time to time rescind or vary any order of this kind, or may make any new or further order.13 In Queensland and Western Australia such a rescission or variation is stated not to affect any act or thing done in reliance on the order before the person doing the act or thing became aware of the application to the court to rescind or vary the order.14 In the Australian Capital Territory, New South Wales and South Australia legislation specifically provides that the powers of the court to make the above orders are in addition to the courts powers under its general administrative jurisdiction and under the trustee legislation or any other statute.15 In the Northern Territory legislation confers on the court the jurisdiction to make an order, on the

application by the trustee or a beneficiary, authorising a trustee either generally or in a particular case:16 (1) to execute a sale, lease, mortgage, surrender, release or other disposition; (2) to make a purchase, acquisition or investment; or (3) to undertake expenditure, as the trustee thinks fit and for which the trustee has no power under the trust instrument or by law. The court may make such an order subject to such terms and conditions as it thinks fit and may direct whether and to whom any expenditure or costs are to be paid out of capital or income of the trust.17 The court may also make such an order in relation to property despite that the property is the subject of a life interest in the whole of the property or any estate or interest in the property.18 An application to the court for the latter order must be made with the consent of all persons having a beneficial interest in the property, and all trustees having an estate or interest on behalf of an unborn child.19 However, the court may dispense with the requirement for consent of a person if that person has been served with a notice that the application will be made, and the person has made no response.20 The court may make an order in relation to the property despite dissent by some interested parties.21 In deciding whether to make an order despite the dissent of some parties the court must have regard to the number and interests of the parties.22 If the property to which the order relates is land, the order is to be produced to the Registrar-General who must give effect to the order by registering any transfer, lease or other document effected pursuant to the order on the land register under the (NT) Land Title Act 2000.23 Notes 1 As to the meaning and effect of the phrase management or administration see [430-5130].2 The statute only applies where there is property vested in trustees: Degan v Lee (1939) 39 SR (NSW) 234 at 240; 56 WN (NSW) 102 per Nicholas J; Community Welfare Foundation v A-G (Vic) [1976] VR 186 at 187 per Gowans J.3 The term trustee is defined in the trustee legislation to include legal representative (ACT) Trustee Act 1925 s 5 (legal representative) (NT) Trustee Act 1893 s 82 (representative) (NSW) Trustee Act 1925 s 5 (legal representative) (QLD) Trusts Act 1973 s 5 (personal representative) (SA) Trustee Act 1936 s 4 (personal representative) (TAS) Trustee Act 1898 s 4 (personal representative) (VIC) Trustee Act 1958 s 3 (personal representative) (WA) Trustees Act 1962 s 6 (representative of the deceased). Hence, the jurisdiction is also available to personal representatives of a deceased person: Moran v Moran (1974) 9 SASR 447 at 450 per Wells J.

4 This can potentially include the remuneration of trustees: Re Queensland Coal and Oil Shale Mining Industry (Superannuation) Ltd [1999] 2 Qd R 524 at 527-8; BC9803005 per Williams J; Re Cuesuper Pty Ltd [2009] NSWSC 981; BC200908568 ; Re Creditors Trust of Jackgreen (International) Pty Ltd [2011] NSWSC 748; BC201105247 . As to the courts statutory and inherent power to award remuneration to a trustee see [430-3985], [430-3990].5 Transaction has been construed as a word of wide import: Re Bowmil Nominees Pty Ltd [2004] NSWSC 161; BC200401282 at [16] per Hamilton J . It clearly includes amendment of a trust instrument: Re Philips New Zealand Ltd [1997] 1 NZLR 93 ; James N Kirby Foundation Ltd v A-G (NSW) (2004) 62 NSWLR 276; 213 ALR 366; [2004] NSWSC 1153; BC200408594 at [16] per White J; Stein v Sybmore Holdings Pty Ltd (2006) 64 ATR 325; 2006 ATC 4741; [2006] NSWSC 1004; BC200607712 at [45] per Campbell J.6 As to the meaning of the term expedient see [4305135]. The courts power is discretionary: Re Basdens Settlement Trusts; Basden v Basden [1943] 2 All ER 11.7 The Queensland and Western Australian legislation provides that, as an alternative basis to the expediency jurisdiction, the court may sanction a transaction that is, in the courts opinion, in the best interests of the beneficiaries: (QLD) Trusts Act 1973 s 94(1) (WA) Trustees Act 1962 s 89(1). The latter criterion does not require a consideration of the interests of potential beneficiaries under a power of appointment: Re Agar [1981] 2 NZLR 684 at 686 per Casey J. 8 In all jurisdictions except Queensland and Western Australia, if the transaction sought to be authorised can be effected pursuant to other powers, the court does not have the jurisdiction to make an order, because the legislation is premised on a transaction that cannot be effected by reason of the absence of any power for that purpose vested in the trustees by the instrument: Re Pratts Will Trusts; Barrow v McCarthy [1943] Ch 326 ; Municipal and General Securities Co Ltd v Lloyds Bank Ltd [1950] Ch 212; [1949] 2 All ER 937 ; Re Basdens Settlement Trusts; Basden v Basden [1943] 2 All ER 11. However, the validity of any order made under this jurisdiction cannot be impeached on the ground that on subsequent investigation by the same or another court it is found that the transaction thereby authorised could have been carried out on the authority of the trust instrument alone: Degan v Lee (1939) 39 SR (NSW) 234 at 241-2; 56 WN (NSW) 102 per Nicholas J.9 The addition of the phrase or it is inexpedient or difficult or impracticable to effect without the assistance of the court in the Queensland and Western Australian legislation (and its New Zealand counterpart: (NZ) Trustee Act 1956 s 64) means that in those jurisdictions there is no need to establish an absence of the power, as the jurisdiction will arise also where it is inexpedient or difficult or impracticable: Re Allison (decd) [1958] NZLR 678 at 680 per Adams J; Re Ebbett (decd) [1974] 1 NZLR 392 at 398 per Perry J. Compare Ryan v Public Trustee of Queensland [1998] 1 Qd R 679 at 685 per Williams J (ruling that if the power in question is already conferred by the trust instrument or by statute, the court has no jurisdiction to make the order).10 Although the legislation is phrased in discretionary terms (may), there is likely to be only one circumstance in which a court would be likely to hold that the elements of the section were met but in its discretion decline to make the order, if there was some means other than the making of that order by which the same practical objective could be achieved as would be achieved were power to enter the dealing conferred: Stein v Sybmore Holdings Pty Ltd (2006) 64 ATR 325; 2006 ATC 4741; [2006] NSWSC 1004; BC200607712 at [65] per Campbell J (suggesting where the trust deed could be rectified instead: see [430330]).11 As to the meaning of the phrase including adjustment of the respective rights of the beneficiaries see [430-5140].12 (ACT) Trustee Act 1925 s 81(1) (NSW) Trustee Act 1925 s 81(1) (QLD) Trusts Act 1973 s 94(1) (SA) Trustee Act 1936 s 59B(1) (TAS) Trustee Act 1898 s 47(1)

(VIC) Trustee Act 1958 s 63(1) (WA) Trustees Act 1962 s 89(1). In the Australian Capital Territory, New South Wales and South Australia legislation further provides that the foregoing is deemed to empower the court, where it is satisfied that an alteration whether by extension or otherwise of the trusts or powers conferred on the trustees by the trust instrument or by law is expedient, to authorise the trustees to do or to abstain from doing any act or thing which if done or omitted by them without the authorisation of the court or the consent of the beneficiaries would be a breach of trust, and in particular the court may authorise the trustees: (1) to sell trust property, notwithstanding that the terms or consideration for the sale may not be within any statutory powers of the trustees, or within the terms of the trust instrument or may be forbidden by that instrument; (2) to postpone the sale of trust property; (3) to carry on any business forming part of the trust property during any period for which a sale may be postponed; (4) to employ capital money subject to the trust in any business which the trustees are authorised by the instrument, if any, creating the trust or by law to carry on; and (5) in South Australia, to borrow money on such terms and conditions as the court orders: (ACT) Trustee Act 1925 s 81(2) (NSW) Trustee Act 1925 s 81(2) (SA) Trustee Act 1936 s 59B(2). There are no equivalent provisions in the other jurisdictions. The latter provision is unlikely to add to the scope or breadth of the courts jurisdiction conferred by subsection (1): Riddle v Riddle (1952) 85 CLR 202 at 219; 26 ALJ 86; [1952] ALR 167 per Williams J (subsection (2) widens, if it is possible to do so, the jurisdiction of the court beyond that conferred by subsection (1)). See also Patros v Patros (2007) 16 VR 182; [2007] VSC 83; BC200701996 at [9] per Cavanough J (who opined that the words without the authorisation of the Court or the consent of the beneficiaries, would be a breach of trust were probably included in the legislation only as a matter of caution, and that the Victorian provision should be read as containing the same words implicitly). The Tasmanian legislation does not apply to trustees of a settlement for the purposes of the (TAS) Settled Land Act 1884: (TAS) Trustee Act 1898 s 47(4). As to the application of this jurisdiction to vary investments powers see [430-4645]. In addition to the foregoing statutory jurisdiction, in some jurisdictions, the court also has a statutory jurisdiction to approve a transaction on behalf of a minor: see [430-3530].

13 (ACT) Trustee Act 1925 s 81(3) (NSW) Trustee Act 1925 s 81(3) (QLD) Trusts Act 1973 s 94(2) (SA) Trustee Act 1936 s 59B(3) (TAS) Trustee Act 1898 s 47(2) (VIC) Trustee Act 1958 s 63(2) (WA) Trustees Act 1962 s 89(2). There are no equivalent provisions in the Northern Territory. 14 (QLD) Trusts Act 1973 s 94(2) (WA) Trustees Act 1962 s 89(2). 15 (ACT) Trustee Act 1925 s 81(4) (NSW) Trustee Act 1925 s 81(4) (SA) Trustee Act 1936 s 59B(4). 16 (NT) Trustee Act 1893 s 50A(1).17 Ibid s 50A(2).18 Ibid s 50A(3).19 Ibid s 50A(4).20 Ibid s 50A(5). A person who has been served with a notice that the application will be made may appear in court to consent or dissent to the making of the order sought: ibid s 50A(6).21 Ibid s 50A(7).22 Ibid s 50A(8).23 Ibid s 50A(9). The paragraph below is current to 20 April 2012 [430-5125] Purpose of statutory jurisdiction The statutory power to authorise variation of a trust recognises that trust instruments and the general law may prove inadequate to clothe the trustees with the requisite powers to manage and administer trust estates over a period of years to the best advantage.1 It is aimed at ensuring that trust property is managed advantageously as possible in the interests of the beneficiaries.2 The jurisdiction is not directed at altering the substantive trusts in any way, but is designed to give the trustees power to administer the trust in a more satisfactory and effective way.3 It is a remedial jurisdiction intended to enlarge the powers of the court, and it follows that it should be construed liberally.4 The effect of the court permitting the exercise by a trustee of a power which is not in the trust instrument or conferred by statute is the same as though that power had been inserted as an overriding power in the trust instrument.5 However, the existence of the courts jurisdiction does not avoid the need to confer powers in the trust instrument, for this serves to avoid applications to the court. Moreover, express powers in the trust instrument may confer broader powers than those under the legislation.6 Notes 1 Riddle v Riddle (1952) 85 CLR 202 at 224; 26 ALJ 86; [1952] ALR 167 per Williams J .2 Re Downshires Settled Estates; Marquess of Downshire v Royal Bank of Scotland [1953] Ch 218; [1953] 1 All ER 103 at 119 per Evershed MR and Romer LJ .3 Re Shipwrecked Fishermen and Mariners Royal Benevolent Society [1959] Ch 220 at 228; [1958] 3 All ER 465 per Danckwerts J ; City of Burnside v A-G (SA) (1993) 61 SASR 107 at 129; 81 LGERA 167 per Legoe J . Compare Arakella Pty Ltd v Paton (2004) 60 NSWLR 334; [2004] NSWSC 13; BC200400153 at

[84], [85] per Austin J .4 Re Mayne (decd) (1928) 28 SR (NSW) 157 at 161; 45 WN (NSW) 46 per Harvey CJ; Degan v Lee (1939) 39 SR (NSW) 234 at 241; 56 WN (NSW) 102 per Nicholas J; Royal Melbourne Hospital v Equity Trustees Ltd (trustee of Estate of Langford (decd)) (2007) 18 VR 469; [2007] VSCA 162; BC200706770 at [12], [29] per Ashley and Redlich JJA, at [148] per Bell AJA .5 Re Mair; Richards v Doxat [1935] 1 Ch 562 at 566 per Farwell J.6 Re Manistys Settlement; Manisty v Manisty [1974] Ch 17; [1973] 2 All ER 1203; [1973] 3 WLR 341 . The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [430-5130] Management or administration The expediency jurisdiction can only be exercised by the court in the management or administration of the trust property.1 The use of the word administration as an alternative to the word management, even though the words overlap, aims to avoid an unduly narrow interpretation that may have pervaded if only one of those words were used.2 The phrase refers to both the manner in which the trust property is managed, administered, handled, directed or controlled, and the actual carrying out of those functions.3 The phrase management or administration, though it is of wide import,4 confines the jurisdiction to the managerial supervision and control of trust property on behalf of the beneficiaries;5 the court cannot completely rewrite the trust deed, approve an arrangement which changes the whole substratum of the trust, or substitute a completely different object from that which the trust was created to achieve.6 Where, however, an arrangement, while leaving the substratum, effectuates the purpose of the original trust by other means, it may still be possible to regard that arrangement as merely varying the original trusts, even though the means employed are wholly different and the form is completely changed.7 To this end, management and administration of the trust property does not confine the power to be exercised to retention of the property; instead the phrase is a means of ensuring that the question of what power should be exercised or sought arises in the course of management and administration of the trust property.8 The management or administration limitation serves to excludes the courts expediency jurisdiction in respect of bare trustees.9 However, it does not restrict the court from doing any administrative act in the proper administration of a trust, such as varying a power of appointment of new trustees.10 Notes 1 (ACT) Trustee Act 1925 s 81(1) (NSW) Trustee Act 1925 s 81(1) (SA) Trustee Act 1936 s 59B(1) (QLD) Trusts Act 1973 s 94(1) (TAS) Trustee Act 1898 s 47(1) (VIC) Trustee Act 1958 s 63(1) (WA) Trustees Act 1962 s 89(1). The equivalent provision in the Northern Territory is phrased in different terms: see [430-5120].

2 Re Downshires Settled Estates; Marquess of Downshire v Royal Bank of Scotland [1953] Ch 218; [1953] 1 All ER 103 at 118 per Evershed MR and Romer LJ. See also Hornsby v Playoust (2005) 11 VR 522; [2005] VSC 107; BC200502275 at [17]-[19] per Mandie J (who accepted the submission that the words management and administration were not synonymous, and that management refers to the management of trust property in the commercial or practical sense, whereas administration encompasses all of the legal powers and duties that may be possessed by a trustee in respect of trust property).3 Arakella Pty Ltd v Paton (2004) 60 NSWLR 334; [2004] NSWSC 13; BC200400153 at [88] per Austin J ; Royal Melbourne Hospital v Equity Trustees Ltd (trustee of Estate of Langford (decd)) (2007) 18 VR 469; [2007] VSCA 162; BC200706770 at [150] per Bell AJA .4 Royal Melbourne Hospital v Equity Trustees Ltd (trustee of Estate of Langford (decd)) (2007) 18 VR 469; [2007] VSCA 162; BC200706770 at [150] per Bell AJA .5 Re Downshires Settled Estates; Marquess of Downshire v Royal Bank of Scotland [1953] Ch 218; [1953] 1 All ER 103 at 118 per Evershed MR and Romer LJ .6 Re Balls Settlement Trusts; Ball v Ball [1968] 2 All ER 438; [1968] 1 WLR 899 at 905 per Megarry J ; Re Smith (decd) [1975] 1 NZLR 495 at 497-8 ; Banicevich v Gunson [2006] 2 NZLR 11 at [58] per Chambers J , CA(NZ); Armidale Dumaresq Council v A-G (NSW) (No 1) [2007] NSWSC 557; BC200706850 at [19] per Young CJ in Eq (the order must not subvert the trust); Westfield Queensland No 1 Pty Ltd v Lend Lease Real Estate Investments Ltd [2008] NSWSC 516; BC200803975 at [66] per Einstein J . For example, the court cannot exercise this jurisdiction so as to substitute an entirely new well drawn modern investment clause in place of an old fashioned and ambiguous investment clause: Re Powell-Cottons Resettlement [1956] 1 All ER 60. Compare Arakella Pty Ltd v Paton (2004) 60 NSWLR 334; [2004] NSWSC 13; BC200400153 at [84], [85] per Austin J .7 Re Balls Settlement Trusts; Ball v Ball [1968] 2 All ER 438; [1968] 1 WLR 899 at 905 per Megarry J . See, for example, Hornsby v Playoust (2005) 11 VR 522; [2005] VSC 107; BC200502275 (conversion of beneficial interest under a trust to shares in a company held to be expedient in the management and administration of the trust).8 Trust Company Fiduciary Services Ltd v Challenger Managed Investments Ltd (2008) 68 ACSR 356; [2008] NSWSC 1155; BC200809642 at [29] per Rein J (court conferred power on trustee to agree to partial surrender or release of trust property (in the nature of security) in return for property (also in the nature of security, but more highly rated) to be created by new trusts with same trustee and beneficiaries).9 Perpetual Trustee Co Ltd v Godsall [1979] 2 NSWLR 785 at 791 per Rath J . As to bare trustees see [430-3115]. 10 Re Mayne (decd) (1928) 28 SR (NSW) 157; 45 WN (NSW) 46 . The paragraph below is current to 20 April 2012 [430-5135] Expedient The word expedient has been defined to mean advantageous, desirable, suitable to the circumstances of the case,1 and as a criterion of the widest and most flexible kind.2 The expediency jurisdiction may only be exercised by the court in circumstances where it is expedient in the interests of the beneficiaries.3 This does not require the court to be satisfied that the transaction is expedient in the interests of each and every beneficiary considered separately, but that the court take into consideration the interests of all the beneficiaries, and, upon a broad commonsense view of the matter, must be able to conclude that the proposed transaction can fairly be said to be expedient for the trust as a whole.4 So a power, otherwise expedient for the management or administration of the trust property and in the interests of the trust or beneficiaries as a whole, may be conferred even if its impact may be relatively positive for some beneficiaries and relatively negative for others; the power does not necessarily lose its character of being expedient for that purpose because it may impact differentially on the beneficiaries.5 It follows that, whilst the court can exercise its expediency jurisdiction without the consent of the beneficiaries, it should not act in one way or another without the attitude of the beneficiaries being made clear to it.6 That the beneficiaries as a whole endorse the variation remains highly persuasive evidence in favour of the order sought.7 Where it proves expedient the court may even authorise a dealing that would otherwise amount to a breach of fiduciary duty, such as the purchase of trust property8 or the charging of (additional)

commission9 by the trustee. In making an order pursuant to this jurisdiction, the court is not necessarily required to scrutinise all steps necessary to implement the plan in order to assure itself that the plan is apposite to effect the desired result; rather, once it is established that it is expedient in the management or administration of the trust to confer the power on the trustees, in the absence of countervailing circumstances, the court will make the order.10 That the courts jurisdiction is sought to be invoked predominantly or even solely for the purpose of reducing the burden of taxation will not preclude the court from finding that it is expedient that the order sought be made.11 Notes 1 Riddle v Riddle (1952) 85 CLR 202 at 222; 26 ALJ 86; [1952] ALR 167 per Williams J .2 Riddle v Riddle (1952) 85 CLR 202 at 214; 26 ALJ 86; [1952] ALR 167 per Dixon J . See also Re Mayne (decd) (1928) 28 SR (NSW) 157 at 161; 45 WN (NSW) 46 per Harvey CJ ; Re Strang (1941) 41 SR (NSW) 114 at 115; 58 WN (NSW) 108 per Jordan CJ , SC(NSW), Full Court; Re Hart (decd); Trustees Executors and Agency Co Ltd v Brash [1954] VLR 239 at 245; [1954] ALR 552 per Dean J ; Ku-ring-gai Municipal Council v A-G (1954) 55 SR (NSW) 65 at 73-4 , SC(NSW), Full Court; Re Baker (decd); Rouse v A-G (Vic) [1961] VR 641 at 645-7 per Adam J ; Re Sykes (decd) [1974] 1 NSWLR 597 at 600-2 per Helsham J ; Re WD & HO Wills (NZ) Ltd Pensions Fund [1974] 2 NZLR 27 at 31 per Cooke J ; Perpetual Trustee Co Ltd v Godsall [1979] 2 NSWLR 785 at 790-2 per Rath J ; Arakella Pty Ltd v Paton (2004) 60 NSWLR 334; [2004] NSWSC 13; BC200400153 at [76]-[82] per Austin J ; James N Kirby Foundation Ltd v A-G (NSW) (2004) 62 NSWLR 276; 213 ALR 366; [2004] NSWSC 1153; BC200408594 at [13] per White J ; Royal Melbourne Hospital v Equity Trustees Ltd (trustee of Estate of Langford (decd)) (2007) 18 VR 469; [2007] VSCA 162; BC200706770 at [154] per Bell AJA .3 Re Cravens Estate; Lloyds Bank Ltd v Cockburn (No 2) [1937] Ch 431 at 436 per Farwell J ; Degan v Lee (1939) 39 SR (NSW) 234 at 239; 56 WN (NSW) 102 per Nicholas J ; Riddle v Riddle (1952) 85 CLR 202 at 222 per Williams J, at 227 per Fullagar J; 26 ALJ 86; [1952] ALR 167 ; Re Dawson (decd) [1959] NZLR 1360 at 1362 per Adams J ; Re Sykes (decd) [1974] 1 NSWLR 597 at 600 per Helsham J ; Perpetual Trustee Co Ltd v Godsall [1979] 2 NSWLR 785 at 790 per Rath J; Re Earl of Strafford (decd); Royal Bank of Scotland Ltd v Byng [1980] Ch 28 at 45; [1979] 1 All ER 513; [1978] 3 WLR 223 per Buckley LJ , CA; Re Ansett Australia Ltd (2006) 151 FCR 41; 56 ACSR 718; 24 ACLC 386; [2006] FCA 277; BC200601460 at [83]-[86] per Goldberg J (refusing to authorise a dealing that was adverse to the interests of the beneficiaries); Stein v Sybmore Holdings Pty Ltd (2006) 64 ATR 325; 2006 ATC 4741; [2006] NSWSC 1004; BC200607712 at [50] per Campbell J ; Royal Melbourne Hospital v Equity Trustees Ltd (trustee of Estate of Langford (decd)) (2007) 18 VR 469; [2007] VSCA 162; BC200706770 at [155] per Bell AJA .4 Re Dawson (decd) [1959] NZLR 1360 at 1363 per Adams J. Compare Arakella Pty Ltd v Paton (2004) 60 NSWLR 334; [2004] NSWSC 13; BC200400153 at [140] per Austin J ; Banicevich v Gunson [2006] 2 NZLR 11 at [46], [47] per Chambers J, CA(NZ).5 Royal Melbourne Hospital v Equity Trustees Ltd (trustee of Estate of Langford (decd)) (2007) 18 VR 469; [2007] VSCA 162; BC200706770 at [166] per Bell AJA.6 Re Bowmil Nominees Pty Ltd [2004] NSWSC 161; BC200401282 at [18] per Hamilton J .7 Hornsby v Playoust (2005) 11 VR 522; [2005] VSC 107; BC200502275 at [23] per Mandie J; Stein v Sybmore Holdings Pty Ltd (2006) 64 ATR 325; 2006 ATC 4741; [2006] NSWSC 1004; BC200607712 at [56], [57] per Campbell J .8 Patros v Patros (2007) 16 VR 182; [2007] VSC 83; BC200701996 at [15]-[17] per Cavanough J (where the sale was authorised upon the court being satisfied that the valuation for the property was a proper one and that its proposed sale would be for the benefit of the infant defendants, both individually and collectively). As to the purchase of trust property by trustees see [430-4025]-[430-4065].9 Re Queensland Coal and Oil Shale Mining Industry (Superannuation) Ltd [1999] 2 Qd R 524 at 527-8; BC9803005 per Williams J ; Re Cuesuper Pty Ltd [2009] NSWSC 981; BC200908568 ; Re Creditors Trust of Jackgreen (International) Pty Ltd [2011] NSWSC 748; BC201105247 . As to the remuneration

of trustees see [430-3950]-[430-4020].10 Re Sykes (decd) [1974] 1 NSWLR 597 at 602 per Helsham J.11 Re Sykes (decd) [1974] 1 NSWLR 597 at 600-2 per Helsham J; Perpetual Trustee Co Ltd v Godsall [1979] 2 NSWLR 785 at 792 per Rath J. As to the use of the expediency jurisdiction to avoid taxation see further Re Downshires Settled Estates; Marquess of Downshire v Royal Bank of Scotland [1953] Ch 218; [1953] 1 All ER 103 at 136 per Denning LJ; Thomson v Thomson [1954] 2 All ER 462 at 464-5 per Davies J; Re Westons Settlements; Weston v Weston [1969] 1 Ch 223 at 232; [1968] 3 All ER 338 per Stamp J, Ch (affirmed Re Westons Settlements; Weston v Weston [1969] 1 Ch 223 at 245; [1968] 3 All ER 338 per Denning MR, CA); Faye v Faye [1973] WAR 66 at 71 per Lavan J; Stein v Sybmore Holdings Pty Ltd (2006) 64 ATR 325; 2006 ATC 4741; [2006] NSWSC 1004; BC200607712 at [53]-[55], [59]-[61] per Campbell J . The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [430-5140] Creating a new set of beneficial interests There is authority to the effect that the statutory expediency jurisdiction does not authorise the court to vary the interests of the beneficiaries.1 However, this must be viewed against the backdrop of specific provision in the Australian Capital Territory and New South Wales legislation, which is expressed to authorise the court to effect an adjustment of the respective rights of the beneficiaries, and accordingly opens the door to the potential alteration of beneficial interests.2 It must also be seen against the backdrop of statute in Queensland, South Australia, Tasmania, Victoria and Western Australia that confers upon the court the power, in appropriate circumstances, to vary the entitlement interests of the beneficiaries under the trust.3 Notes 1 Re Bs Settlement [1952] 2 All ER 647 at 649 per Roxburgh J, Ch; Re Downshires Settled Estates; Marquess of Downshire v Royal Bank of Scotland [1953] Ch 218 at 248; [1953] 1 All ER 103 at 119 per Evershed MR and Romer LJ (although not precluding the application of the legislation to the extent that an order might incidentally affect the beneficial interests: see, for example, Southgate v Sutton [2011] WTLR 1235; [2011] EWCA Civ 637 ) (approved on appeal Chapman v Chapman [1954] AC 429; [1954] 1 All ER 798; [1954] 2 WLR 723 , HL); Re Lyell (decd) [1977] 1 NZLR 713 at 716-17 per Beattie J; Perpetual Trustee Co Ltd v Godsall [1979] 2 NSWLR 785 at 795 per Rath J; Audio Visual Copyright Society Ltd v Australian Record Industry Assn Ltd (1999) 152 FLR 142 at 162; 46 IPR 29; [1999] NSWCA 947; BC9905926 per Simos J; Royal Melbourne Hospital v Equity Trustees Ltd (trustee of Estate of Langford (decd)) (2007) 18 VR 469; [2007] VSCA 162; BC200706770 at [175] per Bell AJA; Re Estate of Barns [2011] VSC 314; BC201104803 at [43]-[51] per Robson J.2 Stein v Sybmore Holdings Pty Ltd (2006) 64 ATR 325; 2006 ATC 4741; [2006] NSWSC 1004; BC200607712 at [28]-[36] per Campbell J (where the fact that the proposed extension of the vesting day would likely alter the beneficial interests under the trust was found not to be necessarily fatal to the application). In Ku-ring-gai Municipal Council v A-G (1954) 55 SR (NSW) 65 at 74 , SC(NSW), Full Court, the power so conferred was held not to extend to the alteration of the objects where this is the sole purpose of an application, but only where it is a necessary incident of the management or administration of the trust property. Compare Arakella Pty Ltd v Paton (2004) 60 NSWLR 334; [2004] NSWSC 13; BC200400153 at [83]-[85], [101]-[112] per Austin J .3 (QLD) Trusts Act 1973 s 95 (SA) Trustee Act 1936 s 59C (TAS) Variation of Trusts Act 1994 ss 13, 14

(VIC) Trustee Act 1958 s 63A (WA) Trustees Act 1962 s 90. See also [430-5160]-[430-5195] (statutory provision for variation on behalf of infants, unborn and incompetent persons). The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [430-5145] Applicants In Queensland, Tasmania, Victoria and Western Australia legislation provides that an application pursuant to the courts expediency jurisdiction may be made by the trustees, or any of them, or by a person beneficially entitled under the trust.1 In the remaining jurisdictions there is authority to the effect that the power may only be exercised on the application of the trustees.2 Notes 1 (QLD) Trusts Act 1973 s 94(3) (TAS) Trustee Act 1898 s 47(3) (VIC) Trustee Act 1958 s 63(3) (WA) Trustees Act 1962 s 89(4). 2 Re Barton (decd) [1968] SASR 242 . The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation [430-5150] Expediency jurisdiction with respect to charitable trusts The courts expediency jurisdiction applies to charitable trusts in no less extensive a manner than in respect of private trusts.1 However, the management and administration limitation2 prohibits the court from making an order enabling the use of trust property inconsistently with the purpose or object for which the trust was created, even where that purpose has become impossible to fulfil with the means at the trustees disposal or that the machinery designated for effectuating the charitable purpose had failed.3 In the latter case, the settlement of a scheme may be required. 4 Where property is subject to the terms of a charitable trust, the expediency jurisdiction cannot to be used as a substitute for a cy-prs application.5 Notes 1 Freeman v A-G (NSW) [1973] 1 NSWLR 729 at 735 per Helsham J; Clarke v A-G (NSW) (unreported, SC(NSW), Young J, 28 November 1994, BC9403364); Re McNaughton (unreported, SC(NSW), Young J, 8 December 1994) BC9403436 (where the application was refused); Cunliffe v A-G (NSW) (unreported, SC(NSW), Bryson J, 1 December 1997, BC9706320) (sale of trust property authorised); Re Trusts of Kean Memorial Trust Fund; Trustees of Kean Memorial Trust Fund v A-G (SA) (2003) 86 SASR 449; 228 LSJS 208; [2003] SASC 227; BC200304075 at [45] per Besanko J (rejecting the contrary view espoused in City of Burnside v A-G (SA) (1993) 61 SASR 107 at 141; 81 LGERA 167 per Legoe J); James N Kirby Foundation Ltd v AG (NSW) (2004) 62 NSWLR 276; 213 ALR 366; [2004] NSWSC 1153; BC200408594 at [11] per White J (amendment of trust deed of charitable foundation authorised); Norman v Australasian

White J (amendment of trust deed of charitable foundation authorised); Norman v Australasian Conference Association Ltd [2008] VSC 573; BC200811767 at [15]-[30] per Judd J (early transfer of capital authorised). Compare RSL Veterans Retirement Villages Ltd v NSW Minister for Lands [2006] NSWSC 1161; BC200609149 at [38][49] per Palmer J (application refused because the proposed changes subverted the essential characteristic of the trusts objects). The Tasmanian legislation specifically provides that the powers conferred on the court in its expediency jurisdiction extend to all property vested in trustees for charitable, religious or public trusts or purposes: (TAS) Trustee Act 1898 s 47(5). As to charitable trusts see charities. 2 As to management or administration see [430-5130].3 Freeman v A-G (NSW) [1973] 1 NSWLR 729 at 735-6 per Helsham J .4 Freeman v A-G (NSW) [1973] 1 NSWLR 729 at 736 per Helsham J . See also Re Shipwrecked Fishermen and Mariners Royal Benevolent Society [1959] Ch 220; [1958] 3 All ER 465 ; Baptist Union of New Zealand v A-G [1973] NZLR 42. As to schemes see charities [75-635]-[75-805]. 5 City of Burnside v A-G (SA) (1993) 61 SASR 107 at 130; 81 LGERA 167 per Legoe J As to cy-prs applications see charities [75-700]-[75-755]. The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [430-5155] Contrary provision in trust instrument In Queensland, Tasmania and Western Australia trustee legislation specifically provides that an order can be made pursuant to the expediency jurisdiction notwithstanding anything to the contrary contained in the trust instrument.1 In other jurisdictions, in view of the breadth of the expediency criterion,2 and the absence of any limitation of this kind in the statute, it similarly appears that the court can make an order even though it may be inconsistent with, or contrary to, the terms of the trust instrument,3 although the courts usual inclination to give effect to the settlors intention means that this is likely to be an unusual outcome.4 Notes 1 (QLD) Trusts Act 1973 s 79 (TAS) Trustee Act 1898 s 47(5) (WA) Trustees Act 1962 s 89(3). See also Palmer v McAllister (1991) 4 WAR 206 at 210 per Owen J (the (WA) Trustees Act 1962 s 89(3) is designed to prevent the jurisdiction of the court being ousted by the trust instrument and it goes no further). Palmer v McAllister, above, dealt with an express prohibition against the exercise of the power sought to be authorised. Owen J held that an express prohibition is not absence of any power, and therefore the order sought could not be made under (WA) Trustees Act 1962 s 89. This view must be queried given the obvious intent of ibid s 89(3) (and its equivalents). 2 As to which see [430-5135].3 Riddle v Riddle (1952) 85 CLR 202 at 223; 26 ALJ 86; [1952] ALR 167 per Williams J ; Alexander v Alexander [2011] WTLR 187; [2011] EWHC 2721 (Ch). Compare Riddle v Riddle (1952) 85 CLR 202; 26 ALJ 86; [1952] ALR 167 at 235 per Kitto J in dissent.4 Royal Melbourne Hospital v Equity Trustees Ltd (trustee of Estate of Langford (decd)) .

(2007) 18 VR 469; [2007] VSCA 162; BC200706770 at [115] per Bell AJA

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(B) Statutory Provision for Variation on Behalf of Incapable Beneficiaries The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation For information on (CTH), (NSW), (QLD) and (VIC) Acts cited in this paragraph see Statutes Annotations [430-5160] Prerequisites for statutory jurisdiction In Queensland, South Australia, Tasmania, Victoria and Western Australia legislation confers upon the court the power to vary the entitlement interests of the beneficiaries under the trust and to give consent on behalf of infants, unborn and incompetent persons.1 Except in South Australia, 2 the legislation provides that where property is held on trusts3 arising under any will settlement or other disposition,4 the court may if it thinks fit 5 approve6 any arrangement7 (by whomsoever proposed8 and whether or not there is any other person beneficially interested who is capable of giving assent) varying9 or revoking all or any of the trusts, or enlarging the powers of the trustees of managing or administering any of the property subject to the trusts (and, in Tasmania, or resettling an interest under the trusts), on behalf of: (1) any person having, directly or indirectly, an interest,10 whether vested or contingent, under

the trusts who by reason of minority or other incapacity11 is incapable of assenting; 12 (2) any person (whether ascertained or not) who may become entitled, directly or indirectly, to an interest under the trusts as being at a future date or on the happening of a future event a person of any specified description or a member of any specified class of persons;13 (3) any person unborn14 (and, in Tasmania and Western Australia, unknown); or (4) any person15 in respect of any discretionary interest 16 of his or hers under protective trusts17 where the interest of the principal beneficiary18 has not failed or determined.19 In Queensland legislation provides that in the case of an unascertained person whose entitlement is dependent on a future event which the court is satisfied is unlikely to occur, or where the court approves of an arrangement on behalf of a person referred to in the preceding paragraph, the court must not approve an arrangement on behalf of any person unless the carrying it out would be for the benefit of that person.20 In Victoria, except where the court approves an arrangement on behalf of any person referred to in list item (4) above,21 the court is prohibited from approving an arrangement on behalf of any person unless its carrying out would be for the benefit of that person.22 In Western Australia, again except where the court approves an arrangement on behalf of a person referred to in paragraph list item (4) above, the court must not approve an arrangement on behalf of any person if the arrangement is to his or her detriment; and, in making this determination, the court may have regard to all the benefits that may accrue to him or her directly or indirectly in consequence of the arrangement, including the welfare and honour of the family to which he or she belongs.23 In Tasmania legislation requires that, prior to exercising its jurisdiction to vary, the court must be satisfied its exercise is in the interests of each person on behalf of whom the court may approve the proposed arrangement; and in determining this the court must have regard to stated financial and non-financial factors.24 It is further provided that, before a proposed arrangement is submitted to the court for approval, it must have the consent in writing of any person, other than a person on whose behalf the court may approve an arrangement, who is beneficially interested under the trusts and who is capable of giving consent.25 In Queensland and Victoria legislation expressly provides that which must be implied elsewhere, namely that the statutory power in question does not limit the courts statutory jurisdiction to vary trusts on the basis of expediency.26 Notes 1 (QLD) Trusts Act 1973 s 95 (SA) Trustee Act 1936 s 59C (TAS) Variation of Trusts Act 1994 ss 13, 14 (VIC) Trustee Act 1958 s 63A (WA) Trustees Act 1962 s 90.

There are no equivalent provisions in the other jurisdictions, but in New South Wales there has been judicial call for such provisions: Re Bowmil Nominees Pty Ltd [2004] NSWSC 161; BC200401282 at [8] per Hamilton J . 2 As to the South Australian legislation see [430-5195].3 The courts jurisdiction to vary is not limited to property within the jurisdiction, nor is it limited to trusts governed by the law of the jurisdiction where the application is made: Re Kers Settlement Trusts [1963] Ch 553 ; Re Pagets Settlement [1965] 1 All ER 58 .4 The term disposition in this context means any act where property has been put into the hands of a person and is held by that person on trust for another person: Re Nilant (2004) 182 FLR 1; 204 ALR 674; [2004] WASC 7; BC200400056 at [31] per Barker J .5 As to exercise of the courts discretion see further [430-5170].6 The variation results from an arrangement between the beneficiaries. The role of the court is to approve and consent to that arrangement on behalf of incapable beneficiaries: Re Viscount Hambledens Will Trusts [1960] 1 All ER 353n; [1960] 1 WLR 82; Inland Revenue Commissioners v Holmden [1968] AC 685 at 701, 710, 713; [1968] 1 All ER 148 at 151, 156-7, 159 per Lord Reid, Lord Guest and Lord Wilberforce respectively, HL; Re Holts Settlement; Wilson v Holt [1969] 1 Ch 100 at 108-18; [1968] 1 All ER 470 at 472-7 per Megarry J; Re Balls Settlement Trusts; Ball v Ball [1968] 2 All ER 438 at 442-3; [1968] 1 WLR 899 at 905 per Megarry J; Spens v IRC [1970] 3 All ER 295 at 300-1; [1970] 1 WLR 1173 at 1183-4 ; Re Estate of Barns [2011] VSC 314; BC201104803 at [61]-[73] per Robson J.7 There is no need for the arrangement to be inter partes in some sense; the word arrangement is very wide, and includes any proposal put forward for varying or revoking the trusts: Re Steeds Will Trusts [1960] Ch 407 at 419; [1960] 1 All ER 487 at 492 per Evershed MR; Re Blocksidge [1997] 1 Qd R 234 at 237; BC9603812 per Williams J. For example, the court has the power to substitute a foreign settlement for a domestic one: Re Seales Marriage Settlement [1961] Ch 574; [1961] 3 All ER 136 ; Re Windeatts Will Trusts [1969] 2 All ER 324; [1969] 1 WLR 692. In Re Pittari [1967] VR 800 Winneke CJ enlarged the trustees powers where an income beneficiary became of unsound mind and incapable of managing his affairs. See also Palmer v McAllister (1991) 4 WAR 206 . An arrangement can extinguish a power of appointment without an express deed of release: Re Courtaulds Settlement; Courtauld v Farrer [1965] 2 All ER 544n. The court need not approve the entire arrangement proposed; it can approve parts of it: Re Coopers Settlement; Cooper v Cooper [1962] Ch 826; [1961] 3 All ER 636 . 8 The trustees may apply to the court where they are of the opinion that a proposed scheme would be beneficial to the beneficiaries but no beneficiary is willing to apply. However, this is not the general practice, for the trustees duty is to protect, for example, unborn interests: Re Druces Settlement Trusts [1962] 1 All ER 563; [1962] 1 WLR 363 . This may obviate the need for separate representation of different interests, in that there may be no inconsistency between them: Re Munros Settlement Trusts [1963] 1 All ER 209; [1963] 1 WLR 145.9 For the meaning of the word varying see [430-5175].10 All interests sought to be bound should be represented by counsel in open court in the absence of special reasons for avoiding publicity: Re Chapmans Settlement Trusts (No 2); Chapman v Chapman [1959] 2 All ER 48 at 49; [1959] 1 WLR 372 per Vaisey J; Re Rouses Will Trusts [1959] 2 All ER 50 at 51; [1959] 1 WLR 374 per Vaisey J; Re Byngs Will Trusts [1959] 2 All ER 54 at 57; [1959] 1 WLR 375 per Vaisey J. The Tasmanian legislation specifically provides that the interests of all actual or potential beneficiaries of the trusts are to be represented: (TAS) Variation of Trusts Act 1994 s 13(5). Objects of a power of appointment which the donee of which is free to release (thereby extinguishing the interests of the objects) need not be joined if the donee is joined: Re Christie-Millers Settlement Trusts; Westminster Bank Ltd v Christie-Miller [1961] 1 All ER 855; [1961] 1 WLR 462. In Re Agar [1981] 2 NZLR 684 it was held that potential beneficiaries under a power of appointment need not be considered for an application for consent pursuant to the New Zealand section ((NZ) Trustee Act 1956 s 64A).11 In this context incapacity is used in its well-known legal sense of want of legal ability to act. The person in question has a right vested in him or her but is prevented by some impediment from exercising it, the most common examples being minority and committal under mental health legislation: Re Campbell [1991] 3 NZLR 363 at 366 per Eichelbaum CJ.

However, the court may, in determining whether to authorise the variation, take into account the opinions and wishes of a minor: Re Smith (decd) [1975] 1 NZLR 495 at 500 per Cooke J.12 Re Seales Marriage Settlement [1961] Ch 574; [1961] 3 All ER 136 .13 See Re Keysborough Blue Danube Soccer Club [2003] VSC 119; BC200302461 at [26]-[30] per Ashley J. Compare Knocker v Youle [1986] 2 All ER 914; [1986] 1 WLR 934 , Ch D.14 The expression any person unborn encompasses persons who if born would have an entitlement, where it is not known whether any such persons have been born or not: Re Campbell [1991] 3 NZLR 363 at 367 per Eichelbaum CJ.15 The expression any person, being general, includes an unascertained or unborn person: Re Turners Will Trusts; Bridgman v Turner [1960] Ch 122 at 127-8; [1959] 2 All ER 689 per Dankwerts J.16 In Queensland, Victoria and Western Australia legislation provides that the expression discretionary interest means an interest arising under a protective trust whether pursuant to the statutory prescription for protective trusts (as to which see [430-395]) or any like trust: (QLD) Trusts Act 1973 s 95(2) (VIC) Trustee Act 1958 s 63A(2) (WA) Trustees Act 1962 s 90(5). 17 In Queensland, Victoria and Western Australia legislation provides that the expression protective trusts means protective trusts as defined by the trustee legislation, or any other like trusts: (QLD) Trusts Act 1973 s 95(2) (VIC) Trustee Act 1958 s 63A(2) (WA) Trustees Act 1962 s 90(5). The reference to like trusts requires similarity, or identity; similarity in substance is sufficient without the need for similarity in form, detail or wording: Re Wallaces Settlements [1968] 2 All ER 209 at 212; [1968] 1 WLR 711 per Megarry J. As to protective trusts generally see [430-395]. The Tasmanian legislation does not make reference to protective trusts, instead it refers to a person in respect of any interest that may arise by reason of a discretionary power given to a person on the failure or determination of an existing interest that has not failed or determined at the date of the application to the court. This in essence involves a protective trust: (TAS) Variation of Trusts Act 1994 s 13(3)(d). For examples, see Re Pooles Settlements Trusts; Poole v Poole [1959] 2 All ER 340; [1959] 1 WLR 651 (where the court refused to sanction an arrangement which varied protective trusts unless it was amended to provide for any unborn issue who would have become entitled under the original trusts); Re Bakers Settlement Trusts [1964] 1 All ER 482n; [1964] 1 WLR 336n (where property was held on protective trusts for the applicant for life, the court requested evidence of the applicants financial position and that of her husband in order to determine whether the protective trusts continued to serve a useful purpose). 18 In Queensland, Victoria and Western Australia legislation provides that the expression principal beneficiary has the same meaning as in the statutory provision dealing with protective trusts: (QLD) Trusts Act 1973 s 95(2) (VIC) Trustee Act 1958 s 63A(2) (WA) Trustees Act 1962 s 90(5). As to the meaning of principal beneficiary in these provisions see [430-395]. 19 (QLD) Trusts Act 1973 s 95(1)

(TAS) Variation of Trusts Act 1994 s 13(1), 13(3) (VIC) Trustee Act 1958 s 63A(1) (WA) Trustees Act 1962 s 90(1). 20 (QLD) Trusts Act 1973 s 95(1A) (see Re Ritchies Will Trusts [2005] QSC 81; BC200502047 at [11] per Helman J). As to the meaning of the term benefit in this context see [430-5180]. 21 Although the court need not be satisfied that a proposed arrangement confers any benefit on any person in respect of any discretionary interest of his or hers under protective trusts where the interest of the principal beneficiary has not failed or determined (para (4) in the text), this does not mean that the court can disregard that persons interests altogether: Re Burneys Settlement Trusts [1961] 1 All ER 856 at 858; [1961] 1 WLR 545 at 549 per Wilberforce J. The expression any person, being general, includes an unascertained or unborn person. Hence, notwithstanding (3) in the preceding paragraph in the text, the court is not required to find some benefit to be provided to unascertained or unborn persons who have a discretionary interest under a protective trust: Re Turners Will Trusts; Bridgman v Turner [1960] Ch 122 at 127-8; [1959] 2 All ER 689 per Danckwerts J.22 (VIC) Trustee Act 1958 s 63A(1). As to the meaning of the term benefit in this context see [430-5180]. 23 (WA) Trustees Act 1962 s 90(2). As to the meaning of the term detriment in this context see [430-5185]. 24 (TAS) Variation of Trusts Act 1994 s 14. As to these factors see [430-5180]. The South Australian legislation also requires the court to be satisfied that the proposed exercise of its statutory power would be in the interests of beneficiaries of the trust, and, in addition, that it would not result in one class of beneficiaries being unfairly advantaged to the prejudice of some other class: (SA) Trustee Act 1936 s 59C(3)(b). As to the South Australian legislation see [430-5195]. 25 (TAS) Variation of Trusts Act 1994 s 13(4).26 (QLD) Trusts Act 1973 s 95(5) (VIC) Trustee Act 1958 s 63A(5). See also (SA) Trustee Act 1936 s 59C(6). As to the courts expediency jurisdiction see [430-5120]-[430-5155]. The paragraph below is current to 20 April 2012 [430-5165] Purpose of statutory jurisdiction The statutory jurisdiction providing for variation of entitlement interests on behalf of incapable beneficiaries is designed to deal with a situation where the original disposition was intended to endure according to its terms but which in the light of changed attitudes and circumstances it is fair and reasonable to vary.1 Its purpose is to put the court into the shoes of a beneficiary who is incapable of assenting to the variation, revocation or enlargement of powers proposed, and to put the court into the shoes of unborn and unknown persons.2 It enables the court to look afresh at the trust where circumstances have arisen which may not have been foreseen or foreseeable by the settlor.3

The statutory jurisdiction cannot be ousted by the terms of the trust instrument.4 Notes 1 Allen v Distillers Co (Biochemicals) Ltd [1974] 2 WLR 481 at 491 per Eveleigh J.2 Re Greenwood [1988] 1 NZLR 197 at 211 per Tipping J; Goulding v James [1997] 2 All ER 239 at 247 per Mummery LJ ; Muhling v Perpetual Trustees WA Ltd [2001] WASC 225; BC200104912 at [26] per Hasluck J; George v Kollias [2007] VSC 46; BC200701162 at [43] per Hansen J.3 Re Greenwood [1988] 1 NZLR 197 at 212 per Tipping J.4 Goulding v James [1997] 2 All ER 239 at 251 per Mummery LJ . The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation [430-5170] Exercise of courts discretion In that the courts jurisdiction is to be exercised as the court thinks fit, it is more extensive than the limited inherent jurisdiction to vary trusts,1 and is also more extensive than its statutory expediency jurisdiction, which is limited to specified transactions in the management and administration of the trust.2 The court will consider the proposal for variation as a whole, taking into account the purpose of the trust and the settlors intention.3 In exercising its discretion, the courts function is protective, namely to safeguard the interests of those persons who cannot protect themselves.4 As one part of its consideration of the application the court asks itself whether, if the beneficiary or contingent beneficiary whose interest it is attempting to protect, had been alive and of full capacity and properly advised, that person would have been likely to have approved the arrangement on his or her own behalf and with or without conditions or amendment to the scheme.5 The views of the trustee as to the arrangement are also relevant, though not conclusive.6 The court will sanction an arrangement exhibiting a risk to incapable beneficiaries, provided that that risk is one that an adult would be prepared to assume.7 The risk may be guarded against by the execution by the adult beneficiaries of appropriate deeds of covenant containing an undertaking to make good to the incapable beneficiaries any loss they may suffer through the variation.8 However, where there is a risk that is not minimal that a persons interests may be prejudiced by the arrangement, the court will not approve the variation.9 The provision of a written opinion by counsel instructed on behalf of infants, unascertained or unborn persons, is advisable.10 All persons whose interests would be affected by the proposed arrangement should be joined.11 In all jurisdictions except South Australia12 the court can consent to a variation even though the arrangement proposed is designed to reduce the incidence of taxation.13 But the court will not approve an arrangement which is contrary to public policy.14 Notes 1 As to the courts inherent jurisdiction to vary trusts see [430-5115].2 As to the courts statutory expediency jurisdiction to vary trusts see [430-5120]-[430-5155].3 Re Steeds Will Trusts [1960] Ch 407 at 421; [1960] 1 All ER 487 at 493 per Evershed MR, CA; Re Burneys Settlement Trusts [1961] 1 All ER 856 at 858; [1961] 1 WLR 545 per Lord Wilberforce; Re Van Gruisens Will Trusts; Bagger v Dean [1964] 1 All ER 843 at 844 per Ungoed-Thomas J; Faye v Faye [1973] WAR 66 at 73 per Lavan J; Re Greenwood [1988] 1 NZLR 197 at 209-12 per Tipping J; Goulding v James [1997] 2 All ER 239 at 249 per Mummery LJ ;Glenister v Glenister [2001] WASC 133; BC200102699 at [5] . As to the relevance of the settlors intention see [430-5190]. As to the weight to be accorded to the settlors intention see further [430-5190].

4 Re Westons Settlements; Weston v Weston [1969] 1 Ch 223; [1968] 3 All ER 338 .5 Re Greenwood [1988] 1 NZLR 197 at 211 per Tipping J; Faye v Faye [1973] WAR 66 at 71-2 per Lavan J.6 Re Steeds Will Trusts [1960] Ch 407; [1960] 1 All ER 487 , CA.7 Re Cohens Will Trusts; Re Cohens Settlement Trusts [1959] 3 All ER 523; [1959] 1 WLR 865 (approval of an arrangement which was beneficial to infants unless one of the testators children predeceased his widow, who was then almost eighty years of age). See also Re Cohens Will Settlement Trusts; Eloit-Cohen v Cohen [1965] 1 WLR 1229 at 1236 per Sharp J; Re Robinsons Settlement Trusts; Heard v Heard [1976] 3 All ER 61; [1976] 1 WLR 806 ; Re Blocksidge [1997] 1 Qd R 234 at 237-8; BC9603812 per Williams J; Stanbrook v Perpetual Trustees (WA) Ltd (unreported, SC(WA), Murray J, 24 July 1998, BC9803748) (where, so far as any unborn potential beneficiaries may be concerned, the risk of any possible detriment was so remote that it should not be allowed to stand in the way of the generally beneficial arrangement proposed); Muhling v Perpetual Trustees WA Ltd [2001] WASC 225; BC200104912 at [27] per Hasluck J; George v Kollias [2007] VSC 46; BC200701162 at [44] per Hansen J.8 Re Aitkens Trust; Aitken v Aitken [1964] NZLR 838 .9 Re Holts Settlement; Wilson v Holt [1969] 1 Ch 100 at 122; [1968] 1 All ER 470 per Megarry J.10 Re Christmas Settlement Trusts [1986] 1 Qd R 372 at 375 per McPherson J. This represents the English practice: Practice Direction [1976] 1 WLR 884.11 Re Sufferts Settlement [1961] Ch 1; [1960] 3 All ER 561 .12 In South Australia legislation provides that, prior to exercising its powers to vary a trust, the court must be satisfied, inter alia, that the application to the court is not substantially motivated by a desire to avoid, or reduce the incidence of tax: (SA) Trustee Act 1936 s 59C(3)(a). As to the South Australian legislation generally see [430-5195]. 13 Re Clitheroes Settlement Trusts [1959] 3 All ER 789; [1959] 1 WLR 1159 ; Re Tinkers Settlement [1960] 3 All ER 85n; [1960] 1 WLR 1011 ; Re Druces Settlement Trusts [1962] 1 All ER 563; [1962] 1 WLR 363 ; Re Whittomes Trust [1962] NZLR 773 ; Re Beethams Trust; Wardell v Ramsden [1964] NZLR 576 ; Re Drewes Settlement; Drewe v Westminster Bank Ltd [1966] 2 All ER 844n; [1966] 1 WLR 1518; Re Sainsburys Settlement; Sainsbury v First CB Trustee Ltd [1967] 1 All ER 878; [1967] 1 WLR 476 ; Re Lloyds Settlement; Lloyd v Leeper [1967] 2 All ER 314n; [1967] 2 WLR 1078; Re Westons Settlements; Weston v Weston [1969] 1 Ch 223; [1968] 3 All ER 338 , CA; Glenister v Glenister [2001] WASC 133; BC200102699 ; Coote v Clark [2007] WASC 97; BC200703057 .14 Re Michelhams Will Trusts [1964] Ch 550; [1963] 2 All ER 188; [1963] 2 WLR 1238 . The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation [430-5175] Varying Where the substratum of the original trusts remains, that is, the differences between the current and the proposed lie in detail as opposed to substance, the court will treat the arrangement as merely varying the trusts.1 Hence, if the proposed new trusts are very similar to the existing ones, the latter can fairly be said to be varied irrespective of whether all the old words are revoked and replaced by the new ones, or whether changes are simply made to the old provisions.2 However, if an arrangement changes the whole sub-stratum of the trust, then it cannot be regarded merely as varying the trust.3 The settlement of a completely new trust is not, therefore, a variation of an existing trust,4 except in South Australia and Tasmania, where the legislation expressly permits the court to resettling an interest under the trust.5 Notes 1 Re Balls Settlement Trusts; Ball v Ball [1968] 2 All ER 438; [1968] 1 WLR 899 ; Re Blocksidge [1997] 1 Qd R 234 at 237-8; BC9603812 per Williams J.2 Re Holts Settlement; Wilson v Holt [1969] 1 Ch 100; [1968] 1 All ER 470 ; Re Keysborough Blue Danube Soccer Club [2003] VSC 119; BC200302461 at [36]-[41] per Ashley J .3 Re Balls Settlement Trusts; Ball v Ball [1968] 2 All ER 438; [1968] 1 WLR 899 ; Re Keysborough Blue Danube Soccer Club

[2003] VSC 119; BC200302461 at [34] per Ashley J .4 Allen v Distillers Co (Biochemicals) Ltd [1974] 2 WLR 481 at 491 per Eveleigh J. See also Re Ts Settlement Trusts [1964] Ch 158; [1963] 3 All ER 759 (the mother of a beneficiary of a trust who had shown herself to be immature and irresponsible with money, shortly before the latter attained her majority, requested the court to approve an arrangement under which her daughters share would be transferred to new trustees on protective trusts. The court refused to accede to the mothers request, holding that the proposed arrangement was a completely new resettlement. The court did, however, approve an alternative arrangement deferring the daughters right to capital for a period and giving her a protected life interest in the meantime); Wright v Gater [2012] 1 WLR 802; [2012] WTLR 549; [2011] EWHC 2881 (Ch) at [15], [16] per Norris J.5 (SA) Trustee Act 1936 s 59C(1)(b)(ii) (limited to where the trusts are revoked) (TAS) Variation of Trusts Act 1994 s 13(1)(b). The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation [430-5180] Arrangement for benefit of incapable beneficiary Queensland, Tasmania and Victoria An arrangement 1 constitutes a benefit if it can, on the balance of probabilities, be said to be a good bargain.2 Although many of the applications in this respect are motivated as a means of reducing liability to taxation,3 the term benefit in this context is not always synonymous with financial gain. It can encompass administrative advantages and the reduction in future dispute.4 There is English authority to the effect that it suffices that there is benefit of a moral or social kind.5 English courts have to this end declined to approve financially advantageous arrangements on the basis that they could in some way be detrimental to some beneficiaries,6 and have approved financially disadvantageous arrangements in circumstances where other positive factors outweighed that disadvantage.7 However, Australian courts may not construe the term so widely, and there are judicial indications to the effect that a court will not approve a financially inopportune arrangement lightly.8 For example, it has been held that the mere hope of avoiding future family friction is not ordinarily of itself a sufficient benefit to attract the courts jurisdiction,9 although that is not to say that it is always irrelevant.10 In Tasmania legislation is unique in that it requires the court to have regard to the following financial and non-financial criteria in its determination of whether the arrangement is in the interests of the infant, unborn or incompetent person:11 (1) any financial benefit to that person; (2) the absence of any financial disadvantage to that person; (3) any non-financial benefit to that person; (4) the welfare of the family of that person; and (5) any other circumstances that are advanced for or against the proposed arrangement.

Notes 1 As to the position in South Australia see [430-5195]. As to the position in Western Australia see [430-5185].2 Re Druces Settlement Trusts [1962] 1 All ER 563 at 565; [1962] 1 WLR 363 per Russell J.3 Re Clitheroes Settlement Trusts [1959] 3 All ER 789; [1959] 1 WLR 1159 ; Re Sainsburys Settlement; Sainsbury v First CB Trustee Ltd [1967] 1 All ER 878; [1967] 1 WLR 476 ; Re Westons Settlements; Weston v Weston [1969] 1 Ch 223; [1968] 3 All ER 338 ; Glenister v Glenister [2001] WASC 133; BC200102699 ; Wright v Gater [2012] 1 WLR 802; [2012] WTLR 549; [2011] EWHC 2881 (Ch) .4 Re Keysborough Blue Danube Soccer Club [2003] VSC 119; BC200302461 at [42], [43] per Ashley J . See also Salkeld v Salkeld (No 2) [2000] SASC 296; BC200005130 at [48]-[50] per Perry J (suggesting that a narrow view of the word benefit should be avoided).5 Re Holts Settlement; Wilson v Holt [1969] 1 Ch 100 at 121; [1968] 1 All ER 470 per Megarry J; Re Westons Settlements; Weston v Weston [1969] 1 Ch 223 at 245; [1968] 3 All ER 338 per Denning MR, CA.6 Re Westons Settlements; Weston v Weston [1969] 1 Ch 223; [1968] 3 All ER 338 (Denning MR stated at (Ch) 245 that the court must consider educational and social benefits to infants or unborn children. On the facts before him, Lord Denning held that the educational and social drawbacks which would be suffered by the infant beneficiaries were the trust exported to a tax haven outweighed the financial benefit of so doing).7 Re CL [1969] 1 Ch 587; [1968] 1 All ER 1104 (an arrangement was approved under which a mentally ill womans entitlement to interest under a settlement was channelled to her adopted daughters); Re Remnants Settlement Trusts; Hooper v Wenhaston [1970] Ch 560; [1970] 2 All ER 554 (the benefit was only familial, and perhaps spiritual. The trust fund was to go to the children of two daughters on terms that any child who was a practising Roman Catholic at her mothers death should forfeit her interest. Pennycuick J held that the forfeiture provision was a source of possible family dissension and that it was for the benefit of the children of the non-Roman Catholic daughter that the trust be varied by eliminating the forfeiture provision).8 Re Christmas Settlement Trusts [1986] 1 Qd R 372 at 376 per McPherson J See, for example, George v Kollias [2007] VSC 46; BC200701162 .9 Re Christmas Settlement Trusts [1986] 1 Qd R 372 at 376 per McPherson J. In so deciding, McPherson J opined that Re Remnants Settlement Trusts; Hooper v Wenhaston [1970] Ch 560; [1970] 2 All ER 554 (above note 7) had extended the notion of benefit too far (at 376).10 Compare George v Kollias [2007] VSC 46; BC200701162 at [45] per Hansen J, who opined that the view of McPherson J in Re Christmas Settlement Trusts (above note 9) had much to commend it, but added that nevertheless the possibility of family dissension may be an appropriate consideration in the circumstances of a particular case: see, for example, Dwyer v Strahan (unreported, SC(Vic), Southwell J, 14 September 1984) (where a risk of dissension between the families was considered a factor but the variation there proposed was simple and otherwise appropriate); Nicholas v Equity Trustees & Executors Agency Co Ltd (unreported, SC(Vic), 7447/95. Harper J, 27 March 1996) (where there was substantial litigation).11 (TAS) Variation of Trusts Act 1994 s 14. The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation [430-5185] Arrangement to detriment of incapable beneficiary Western Australia The meaning of the phrase not to his or her detriment is not materially different from the phrase for his or her benefit.1 The court has regard to all the benefits which may accrue to that person directly or indirectly in consequence of the arrangement, including the welfare and honour of the family to which he or she belongs.2 If some detriment is found, the variation can only be approved if the court finds that, in the circumstances of the particular case, there exist direct or indirect benefits which counterbalance the disadvantages.3 Notes 1 Re Aitkens Trust; Aitken v Aitken [1964] NZLR 838 at 839 per McGregor J; Re Greenwood

[1988] 1 NZLR 197 at 210 per Tipping J. The provisions permitting variation in New Zealand are stated in similar terms to that in Western Australia: compare (WA) Trustees Act 1962 s 90 and (NZ) Trustee Act 1956 s 64A.2 (WA) Trustees Act 1962 s 90. See also Re Bryant (decd); Bryant v Guardian Trust and Executors Co of New Zealand Ltd [1964] NZLR 846 at 848 per Greeson J; Re Beethams Trust; Wardell v Ramsden [1964] NZLR 576 ; Re Aitkens Trust; Aitken v Aitken [1964] NZLR 838 at 839 per MacGregor J; Palmer v McAllister (1991) 4 WAR 206 at 211-12 ; Coote v Clark [2007] WASC 97; BC200703057 ; Public Trustee v Fiedler [2007] WASC 296; BC200710715 . 3 Re Bryant (decd); Bryant v Guardian Trust and Executors Co of New Zealand Ltd [1964] NZLR 846 at 848 per Greeson J; Re Beethams Trust; Wardell v Ramsden [1964] NZLR 576 . See also Re Aitkens Trust; Aitken v Aitken [1964] NZLR 838 per MacGregor J (adult beneficiaries required to give undertaking to make good any loss suffered by persons under a disability); Palmer v McAllister (1991) 4 WAR 206 at 211-12 (variation affecting two properties where significant benefit to beneficiary for one and no apparent difference for other allowed). The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation [430-5190] Relevance of the settlors intention As the concept of variation of necessity denotes some departure from the intention of the settlor, it is no bar to the variation of a trust under these provisions that such variation is inconsistent with the intention of the settlor.1 The intention of the settlor is, however, relevant as one of the considerations in deciding whether approval should be given, and the court will not lightly authorise arrangements which cut across what the settlor intended to happen.2 The fact that an arrangement goes against the intentions of the settlor may go to the merits of approval or otherwise, but it does not go to jurisdiction.3 In South Australia legislation is unique in its requirement that a court consider whether the proposed exercise of its statutory power accords as far as reasonably practicable with the spirit of the trust.4 Notes 1 Re Greenwood [1988] 1 NZLR 197 at 210-11 per Tipping J.2 Re Greenwood [1988] 1 NZLR 197 at 211 per Tipping J; Re Keysborough Blue Danube Soccer Club [2003] VSC 119; BC200302461 at [35] per Ashley J . But see Goulding v James [1997] 2 All ER 239 at 251 per Sir Ralph Gibson (maintaining that the intention of the testator should have no relevance).3 Re Greenwood [1988] 1 NZLR 197 at 211 per Tipping J.4 (SA) Trustee Act 1936 s 59C(3)(d). As to the South Australian provision see [430-5195]. The paragraph below is current to 20 April 2012 To update legislation see ACL Legislation [430-5195] South Australian legislation In South Australia trustee legislation confers upon the court a broad power to vary trusts which is not required to be on behalf of an infant, unborn or incompetent person.1 The court may, on the application of a trustee, or of any person who has a vested, future, or contingent interest in property held on trust:2 (1) vary or revoke all or any of the trusts; (2)

where trusts are revoked, distribute the trust property in such manner as the court considers just, or resettle the trust property upon such trusts as the court thinks fit; or (3) enlarge or otherwise vary the powers of the trustees to manage or administer the trust property. In any such proceedings the interests of all actual and potential beneficiaries of the trust must be represented, and the court may appoint counsel to represent the interests of any class of beneficiaries who are at the date of the proceedings unborn or unascertained.3 Before the court exercises any of the foregoing statutory powers, it must be satisfied that:4 (1) the application to the court is not substantially motivated by a desire to avoid, or reduce the incidence of tax;5 (2) the proposed exercise of powers would be in the interests of beneficiaries6 of the trust and would not result in one class of beneficiaries being unfairly advantaged to the prejudice of some other class; (3) the proposed exercise of powers would not disturb the trusts beyond what is necessary to give effect to the reasons justifying the exercise of the powers; and (4) the proposed exercise of powers accords as far as reasonably practicable with the spirit of the trust. Any such order is binding upon all present and future trustees and beneficiaries of the trust.7 The statutory power does not apply to charitable trusts,8 and does not derogate from any other power of the court to vary or revoke a trust, or to enlarge or otherwise vary the powers of trustees.9 Notes 1 (SA) Trustee Act 1936 s 59C.2 Ibid s 59C(1).3 Ibid s 59C(2).4 Ibid s 59C(3). Compare [4305190] (relevance of the settlors intention). In the only case to have considered ibid s 59C, Benzija v Adriatic Fisheries Pty Ltd (1984) 37 SASR 545 at 559 , Bollen J opined that there must be some weighty reasons proved before a court would contemplate varying or revoking, and that, even if such reasons existed, the court was still bound to consider the matters listed in (SA) Trustee Act 1936 s 59C(3).5 This provision was included because the variation provision in the (UK) Variation of Trusts Act 1958 s 1, upon which the (SA) Trustee Act 1936 s 59C is loosely based, has been used as a tax saving measure. Examples of this practice include Re Clitheroes Settlement Trusts [1959] 3 All ER 789; [1959] 1 WLR 1159 ; Re Tinkers Settlement [1960] 3 All ER 85n; [1960] 1 WLR 1011 ; Re Druces Settlement Trusts [1962] 1 All ER 563; [1962] 1 WLR 363 ; Re Drewes Settlement; Drewe v Westminster Bank Ltd [1966] 2 All ER 844n; [1966] 1 WLR 1518; Re Sainsburys Settlement; Sainsbury v First CB Trustee Ltd [1967] 1 All ER 878; [1967] 1 WLR 476 ; Re Lloyds Settlement; Lloyd v Leeper [1967] 2 All ER 314n; [1967] 2 WLR 1078; Re Westons Settlements; Weston v Weston [1969] 1 Ch 223; [1968] 3 All ER 338 , CA.6

The phrase in the interests of may be seen to be synonymous with the phrase for the benefit of. Compare Salkeld v Salkeld (No 2) [2000] SASC 296; BC200005130 at [48] per Perry J . As to the meaning of the latter phrase see [430-5180].7 (SA) Trustee Act 1936 s 59C(4).8 Ibid s 59C(5)(b). As to charitable trusts see charities. 9 Ibid s 59C(6). As to the courts other powers to vary or revoke a trust see [430-5115]. As to the courts other powers to enlarge or otherwise vary the powers of trustees see [4305120]-[430-5155].

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