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Page 2 1 of 10 DOCUMENTS: CaseBase Cases

Korbi v Poljak
[2003] NSWSC 671; BC200304168 Court: NSWSC Judges: Macready M Judgment Date: 29/7/2003

Catchwords & Digest

Succession -- Family provision -- Competing needs of beneficiaries -- Blind plaintiff Application for family provision by blind daughter of deceased. Application out of time. Plaintiff's brother is life tenant in house which is only asset of estate. Brother suffers from illness and cannot leave house. Whether satisfactory explanation for delay. Whether provision for plaintiff inadequate. Whether special circumstances of plaintiff outweighed those of her brother. Held: Application dismissed. Extension of time granted. Brother's needs outweigh those of plaintiff. Brother contributed more to estate. Cases considered by this case Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations Considered De Winter v Johnstone BC9505226 (1994) 181 CLR 201; (1994) 123 ALR 481; (1994) 68 ALJR 653; Applied Singer v Berghouse (No 2) (1994) 18 Fam LR 94; [1994] HCA 40; BC9404642 Cited Basto v Basto BC8901738 Considered Phillips v Quinton BC8802070 Considered Fancett v Ware BC8600967 Considered Massie v Laundy BC8601246 [1947] VLR 212; Considered Guskett, Re [1947] ALR 263 Legislation considered by this case Legislation Name & Jurisdiction Family Provision Act 1982 (NSW)

Court NSWCA

Date 23/8/1995

Signal

HCA

14/9/1994

NSWSC NSWSC NSWSC NSWSC VSC

8/9/1989 31/3/1988 3/6/1986 7/2/1986 19/12/1946

Provisions s 16

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2 of 10 DOCUMENTS: Victorian Reports/Judgments/10 VR/NOLAN v NOLAN and Another - 10 VR 626 - 28 April 2003 75 pages

NOLAN v NOLAN and Another - (2003) 10 VR 626

SUPREME COURT OF VICTORIA Dodds-Streeton J 26-29 November, 2-4, 6, 9-12, 16-19 December 200228 April 2003 [2003] VSC 121
Personal property -- Chose in possession -- Gifts inter vivos -- Art works -- Disputed ownership -Alleged gift by delivery -- Artist giving paintings to his wife -- Wife closely involved in promoting husband's artistic career -- Wife lending paintings by artist for public exhibitions -- Exhibition catalogues attributing ownership of some paintings to wife -- Artist's wife predeceasing artist -Artist's adopted daughter sole beneficiary of mother's will -- Artist aware of distribution of paintings by late wife's estate -- Remarriage of artist -- Disputed paintings coming into artist's possession -Artist dying leaving all his chattels to widow -- Daughter belatedly locating circumstantial evidence said to support prior inter vivos gift to her mother -- Daughter's claim as sole beneficiary of mother's will -- Whether artist made a gift -- Donative intention -- Whether necessary to establish words of gift -- Whether claim statute-barred -- Whether constructive trust -- Limitation of Actions Act 1958 (No 6295)ss 6, 21. Administration and probate -- Claim against deceased estate -- Alleged gift inter vivos -- Alleged donor and donee both dead -- Claim based on circumstantial evidence -- Need to approach putative donee's account with caution. Administration and probate -- Beneficiary -- Claim against third party -- Disputed ownership of paintings -- Standing -- Plaintiff life tenant only -- Only trustees having legal title and right to possession -- Estate fully administered -- Beneficiary's right to enforce trustees' rights -- Need for exceptional circumstances -- Beneficiary not entitled to any relief or remedy in own right -- Failure to join trustees in claim -- Proceeding irregularly constituted. Evidence -- Documents -- Admissibility -- Art exhibition catalogues -- Ancient documents -- Hearsay -- Statutory exception -- Business records -- "Person interested" -- Evidence Act 1958 (No 6246)ss 3, 55(1), 55(4), 55(9). Section 55 of the Evidence Act 1958 provided in part as follows:
"(1) In any legal proceeding (not being a criminal proceeding) where direct oral evidence of a fact would be admissible, any statement contained in a document and tending to establish that fact shall be admissible as evidence of that fact if --

Page 5

1a) 1b)

the maker of the statement had at the time of making the statement personal knowledge of the matters dealt with by the statement, and is called as a witness in the proceeding; or the document is, or forms part of, a record relating to any business and made in the course of that business from information supplied (whether directly or indirectly) by persons who had, or may reasonably be supposed to have had, personal knowledge of the matters dealt with in the information they supplied and the person who supplied the information recorded in the statement in question is called as a witness.

... (4) Nothing in this section shall render admissible as evidence in any legal proceeding any statement made by a person interested at a time when the proceedings were pending or anticipated involving a dispute as to any fact which the statement might tend to establish. 10 VR 626 at 627 ... (9) The court may in its discretion reject any statement or defer the admission of and subsequently reject any statement notwithstanding that the requirements of this section are satisfied with respect thereto, if for any reason it appears to it to be inexpedient in the interests of justice that the statement should be then admitted or, as the case requires, should be admitted at all."

Section 3 of the Act defined "document" in very broad terms and "statement" as including any representation of fact whether made in words or otherwise. Section 5 of the Limitation of Actions Act 1958 provided that an action founded on tort could not be brought after the expiration of six years from the date on which the cause of action accrued. Section 21(1) of the Act provided in part that no period of limitation prescribed by the Act applied to an action by a beneficiary under a trust, being an action to recover from the trustee trust property or the proceeds thereof in the possession of the trustee, or previously received by the trustee and converted to his use. The plaintiff, JN, was the daughter of Cynthia Hansen Nolan (CN) and the adopted daughter of the artist Sidney Nolan (Nolan) who had married CN in 1948. Throughout their marriage, most of which was spent in England, CN had acted as her husband's assistant, had actively promoted his artistic career and reputation and had collected art works including Nolan paintings which he had given to her. From the mid1950s to the mid-1970s, Nolan and his wife had each made Nolan paintings from their own collections available for exhibitions of his work in England, the United States of America, Australia and elsewhere and they had collaborated to varying degrees in organising the exhibitions by preparing catalogues which referred to the provenance of the paintings. Three works identified in such catalogues as belonging to CN were "Hare in Trap" (1946), "Royal Hotel" (1948), and "Italian Crucifix" (1955) ("the disputed paintings"). The disputed paintings had been in Nolan's possession from (at the latest) a date in 1976 (the year of CN's death) until he died in 1992 when the first defendant, MN, whom Nolan had married in 1978 and who was his sole beneficiary, took possession of them. The disputed paintings were not specifically referred to in CN's English or Australian wills by which she devised her estate on trust for JN for life with the remainder to JN's issue, subject to a power of encroachment permitting CN's trustees in their absolute discretion to pay the whole or any part of the capital of the estate to or for the benefit of JN. In 1985, the trustees of CN's English will exercised the power of encroachment by executing a deed of appointment determining that the residuary trust fund consisting of specified paintings and other items, which was the entire known residuary English estate (but not including the disputed items), should be held for JN for her own use and benefit absolutely freed from the testamentary trusts. From a date prior to CN's death, JN had believed that "Hare in Trap" had been her mother's property, but in the interests of maintaining good relations with her father JN had not raised the question of its ownership with him. It was not until 2001 that JN obtained circumstantial evidence of her mother's entitlement to that painting. In about 2001-02, JN first apprehended that there were reasons to believe that the other two disputed paintings also belonged to CN. There was evidence that Nolan had not always known of the arrangements which CN made concerning exhibition of his work, that he had retracted or reclaimed gifts to CN or had dealt with such paintings as his own, that CN had concealed some of the exhibition arrangements she had made from Nolan, that Nolan had been concerned when he ascertained that paintings

Page 6 including two of the disputed paintings had been sent to Australia in 1974 for exhibition, and that Nolan was surprised and distressed to receive no benefit under CN's will. In 2002, JN, acting in her capacity as a beneficiary of CN's Australian and English wills, brought proceedings against MN and four other parties involved in the sale at auction of the disputed paintings in 2001 on behalf of MN, seeking a declaration that she was the full beneficial owner and entitled to possession of the disputed paintings, and for related relief. Unable to lead any direct evidence that Nolan had made a gift of the disputed paintings to CN, JN instead sought to establish her case by relying on exhibition catalogues, correspondence, gallery loan agreements, and related items (some of which the trial judge 10 VR 626 at 628 ruled were inadmissible) from which she contended it could be inferred that Nolan had admitted or acknowledged that the disputed paintings belonged to CN. Held, giving judgment for the defendants: (1) The 1985 English deed of appointment did not operate to transfer to the plaintiff, free of trusts, the entire residuary trust fund of CN's English estate whatever it contained. It was effective to transfer only the items which it listed. [95]-[97]. (2) If the disputed paintings were CN's property and constituted assets of her estate:

1a)

1b)

Legal title and the right to possession of them would vest in her trustees. Under the testamentary trusts, the plaintiff had an equitable life interest not in any particular asset but in the residuary estate constituting the proceeds of sale, together with any unsold assets. [108]. The English trustees and not the plaintiff would be entitled to possession and full beneficial ownership and only those trustees would have standing to sue for the relief sought in this proceeding. [111]-[113].

MCC Proceeds Inc v Lehman Brothers International (Europe) [1998] 4 All ER 675; Young v Murphy [1996] 1 VR 279 referred to (3) In exceptional circumstances, a beneficiary could sue to enforce the trustees' right against third parties for injury to trust property, but in such circumstances the trustees should be joined as defendants to the proceeding. Because the trustees of CN's wills had ceased acting in the mid-1980s when her estate had been fully administered, exceptional circumstances existed justifying the plaintiff as a beneficiary suing on the trustees' right of action, but only for the benefit of the testamentary trusts and not in her own right. The trustees not having been joined in the proceeding, it was irregularly constituted. [114]-[120]. Re Atkinson (deceased) [1971] VR 612; Lidden v Composite Buyers Ltd (1996) 67 FCR 560; Lamru Pty Ltd v Katon Pty Ltd (1998) 44 NSWLR 432 followed (4) The essential elements of a valid gift inter vivos, in the absence of a deed of gift or a declaration of trust were: (a) an intention to make a gift, (b) intention on the part of the donee to accept the gift, and (c) delivery. The documents on which the plaintiff relied contained statements which, even if admissible, did not amount to words of present gift by Nolan to CN. [131], [134]. Russell v Wilson (1923) 33 CLR 538 referred to (5) There was no requirement that donative intention was to be manifested by words of gift. Although donative intention would normally be manifested, and its extent defined, by words, unusual circumstances could be imagined where other means fulfilled those functions. The putative donee seeking to rely on alternative means of establishing donative intention, bore the onus of proving the existence of a present, unequivocal donative intention, attended by the requisite certainty as to object, extent, and whether the gift would take immediate effect. [139], [140].

Page 7 Horsley v Phillips Fine Art Auctions Pty Ltd (1996) 7 BPR 14,360 discussed Re Everett; Executor Trustees & Agency Co of South Australia Ltd v Everett [1917] SASR 52; In re Stoneham; Stoneham v Stoneham [1919] 1 Ch 149; In re Cole (a bankrupt); Ex parte The Trustee of the Property of the Bankrupt [1964] Ch 175; Olsson v Dyson (1969) 120 CLR 365 referred to Corin v Patton (1990) 169 CLR 540 distinguished (6) Evidence that Nolan believed that he had made a gift to CN of an absolute interest, which had already taken effect and which he did not desire to retract, was capable of manifesting donative intention. [142]. 10 VR 626 at 629 In re Ridgeway; Ex parte Ridgeway (1885) 15 QBD 447 discussed The National Trustees Executors & Agency Co Ltd v O'Hea (1904) 29 VLR 814 referred to (7) Where the alleged donor was dead, the claimant donee's account of events had to be approached with caution. Where both the alleged donor and donee were dead, and reliance was placed on documents, caution was particularly necessary. [146]. Lachmi Parshad v Maharajah Narendro Kishore Singh Bahadur LR 19 Ind App 9; Plunkett v Bull (1915) 19 CLR 544; Re Garnett; Gandy v Macaulay (1885) 31 Ch D 1; Thomas v The Times Book Co [1966] 1 WLR 911; Richardson v Armistead [2000] VSC 551; Stick-on Signs Pty Ltd v Sign Gear Pty Ltd [2002] VSC 320 discussed (8) Although an attribution of ownership in a reputable exhibition catalogue provided some evidence of ownership, such catalogues were in no sense equivalent to a register of title and had to be approached with considerable caution independently of the caution which was generally required in assessing claims against a deceased estate. [206]. Kunstammlungen zu Weimar v Elicofon 678 F 2d 1150 (1982) discussed Per Dodds-Streeton J. It was unnecessary to make a finding on whether Nolan, on occasion, promised to make gifts but failed to fulfil his promise; or expressed words of gift but failed to complete the gift by delivering possession to CN; or made valid gifts and CN subsequently acquiesced in their retraction. It was sufficient, in the present context, to observe that CN's readiness to deal with paintings behind Nolan's back, her consciousness of the insecure status of some gifts which, in her view, Nolan failed to recognise or honour and her willingness to address that problem by a measure of secretive self-help, constituted added reasons for strict scrutiny and a cautious approach. [217]. (9) CN could be regarded as a "person interested" within the meaning of s 55(4) of the Evidence Act in relation to a dispute with Nolan over title to paintings in that she would either be likely to enjoy the fruits of success personally or the plaintiff, her daughter, would be likely to benefit significantly in the event of CN's death. [253]. Shepherd v Shepherd [1954] VLR 514; Tobias v Allen (No 2) [1957] VR 221; Morley v National Insurance Co [1967] VR 566; Cullis v Hammersley Iron Pty Ltd [1970] WAR 170; Re Marra Developments Ltd and the Companies Act [1979] 2 NSWLR 193; Albrighton v Royal Prince Alfred Hospital (1980) 2 NSWLR 542; Brown v Petranker (1991) 22 NSWLR 717; Hurley v Southwick [1999] VSC 326; Abigroup Contractors Pty Ltd v BPR Pty Ltd [2001] VSC 484; Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411 discussed Per Dodds-Streeton J. In referring to "a time when the proceedings were pending or anticipated", s 55(4) of the Evidence Act might be seen to indicate that the proceeding in which it was sought to tender the evidence had to be pending or anticipated in order to exclude evidence under that subsection. That

Page 8 construction would uphold a policy of expanding the category of admissible documents, in that exclusion would be mandatory only in more limited circumstances, while s 55(9) would provide a flexible discretionary basis for exclusion. [254]. (10) Neither this proceeding nor any other proceeding was "pending or anticipated" within the meaning of s 55(4) of the Evidence Act at the time CN made the relevant statements contained in the documents. [257]. (11) If it was correct that the very proceeding in which it was sought to tender a statement had to be pending or anticipated in order to exclude evidence under s 55(4), that 10 VR 626 at 630 provision would not apply to exclude CN's statements. While CN might be said to be a "person interested" in the sense that there was a real likelihood of her bias in any dispute as to her title to the paintings, the present proceeding (or any other proceeding) could not be said to be either pending or anticipated. Therefore, CN's interested status would not operate to exclude her statements from admission, although it was relevant to the weight that should be accorded to them. [267], [268]. Jarman v Lambert & Cooke Contractors Ltd [1951] 2 KB 937; Feltafield Ltd v Heidelberg Graphic Equipment (formerly aka Aldus Ltd) (1995) 56 FCR 481; Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority (2002) 4 VR 332; Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (No 3) (1998) 81 FCR 526 discussed (12) While the absence of an opportunity to cross-examine was relevant to the discretion to exclude evidence under s 55(9) of the Evidence Act, great flexibility was permitted. Because the plaintiff was almost entirely dependent on documentary material, the interests of justice would not be served by excluding such evidence. It was appropriate to admit evidence where possible, while exercising due scrutiny and caution in relation to weight. [276]. Compafina Bank v Australia & New Zealand Banking Group Ltd [1982] 1 NSWLR 409; Hurley v Southwick [1999] VSC 326 referred to (13) Although loan agreements, leases or licences executed in relation to paintings, would, if such documents were over 20 years old, satisfy the applicable tests for admissibility of ancient documents because they showed on their face an exercise of ownership, exhibition catalogues, in the ordinary course, did not constitute ancient documents. [290]. Malcomson v O'Dea (1863) 10 HL Cas 593 ; 11 ER 1155; Bristow and Livingstone v Cormican and Nelson (1878) 3 App Cas 641; Blandy-Jenkins v Earl of Dunraven [1899] 2 Ch 221 discussed (14) The plaintiff had failed to establish either words of gift, or the requisite donative intention, in relation to any of the disputed paintings. [402], [426], [456]. Per Dodds-Streeton J. In any event, there was no direct evidence of any act of delivery, actual or constructive by Nolan to CN. [506]. In re Ridgeway; Ex parte Ridgeway (1885) 15 QBD 447; Bashall v Bashall (1894) 11 TLR 152; The National Trustees Executors and Agency Co Ltd v O'Hea (1904) 29 VLR 814; Re Everett; Executor Trustees & Agency Co of South Australia Ltd v Everett [1917] SASR 52; In re Stoneham; Stoneham v Stoneham [1919] 1 Ch 149; Olsson v Dyson (1969) 120 CLR 365; Cochrane v Moore (1890) 25 QBD 57 referred to Horsley v Phillips Fine Art Auctions Pty Ltd (1996) 7 BPR 14,360 discussed (15) Had a gift of the disputed paintings by Nolan to CN been established, a defence based on the Limitation of Actions Act at least would have been made out. Nolan's conduct in assuming the rights of an owner in relation to the paintings from a date in late 1976 would have constituted conversion and the right of action of CN's trustees would pursuant to the Act have been barred after the expiration of a six year period. It was not the case that Nolan would have assumed the status of a constructive trustee to whose conduct no limitation applied by virtue of s 21 of the Act. It was recognised that a donor who had

Page 9 completed all elements of a gift save for the transfer of legal title might be constituted a constructive trustee for the donee while the donor retained legal title. However, if a gift of chattels were complete and valid, the donor would necessarily be divested of legal title to the chattels and there was no legitimate role for a constructive trust in such circumstances. [515], [516]. 10 VR 626 at 631 Penfolds Wines Pty Ltd v Elliot (1946) 74 CLR 204; Re Rose; Rose v Inland Revenue Commissioners [1950] Ch 499 referred to Action This was a claim by the plaintiff in her capacity as a beneficiary of the English and Australian wills of the late Cynthia Nolan against, Mary, Lady Nolan, the sole beneficiary of the will of the late artist, Sir Sidney Nolan, and others for a declaration that the plaintiff was the full beneficial owner and entitled to possession of three works painted by Nolan and alleged by the plaintiff to have been the subject of gifts by him to Cynthia Nolan during their marriage, and for related relief. The facts are stated in the judgment. P N Vickery QC and M J Corrigan for the plaintiff. M A Dreyfus QC and M A Robins for the defendants. Table of contents A. The proceeding [1] B. The parties [2] C. Background to claim [5] D. Brief outline of facts [14] E. The situation of the paintings [43] F. The pleadings [48] G. The plaintiff's standing [83]

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H. Gifts of chattels [121] Intention to make a gift [132] Are words of gift essential? [134] I. Circumstances relevant to weight [146] Claims against deceased estates [146] The Cynthia Nolan Papers [162] The Power Gallery arrangements and the David Jones Art Gallery exhibition [178] The Mollison letters [186] Status of exhibition catalogues [196] Letters from Cynthia to Jinx Nolan 1976 [207] J. Legislation and principles relevant to admissibility [218] Evidence Act 1958 [224]

Page 11 Ancient documents [277] K. The documents [291] 1. Documents relating to "Italian Crucifix" 1955 [292] Evidence of Ms Sloggett [385] Conclusion on donative intention -- "Italian Crucifix" 1955 [402] 2. Documents relating to "Hare in Trap" 1946 [403] Conclusion on donative intention -- "Hare in Trap" 1946 [426] 3. Documents relating to "Royal Hotel" 1948 [427] 10 VR 626 at 632 Conclusion on donative intention -- "Royal Hotel" 1948 [455] The letter from Richard Cobden to Cynthia Nolan dated 11 June 1976/David Jones file [456] L. Delivery [457] M. Delivery in common establishments [466]

Page 12 N. Conclusion [514] Cur Adv Vult

Dodds-Streeton J.
A. The proceeding [1] In this proceeding the plaintiff seeks a declaration that she is the full beneficial owner, and entitled to possession, of three paintings by the late Sir Sidney Nolan entitled "Hare in Trap" 1946, "Royal Hotel" 1948 and "Italian Crucifix" 1955. The plaintiff also seeks orders for delivery up of the paintings and damages pursuant to s 82 of the Trade Practices Act 1974 (Cth). B. The parties [2] The plaintiff, Ms Mosca Gai Jinx Margaret Ellery Nolan (usually known as "Jinx Nolan") is the daughter of the late Cynthia Nolan ("Cynthia") and the celebrated Australian artist, the late Sir Sidney Nolan ("Sidney Nolan"). [3] The first defendant, Mary, Lady Nolan, is the widow of Sidney Nolan, having been married to him from 28 January 1978 until his death on 28 November 1992. [4] The second defendant, Sotheby's Australia Pty Ltd ("Sotheby's") is the auction house which was commissioned by Lady Nolan to auction on her behalf in Melbourne on 16 September 2001, a number of paintings by Sidney Nolan, including the three paintings the subject of this proceeding. C. Background to claim [5] The plaintiff claims title to, and delivery up of "Hare in Trap" 1946, "Royal Hotel" 1948 and "Italian Crucifix" 1955 by Sidney Nolan, in her capacity as a beneficiary of both the Australian and English wills of her mother, Cynthia, who died on 24 November 1976. [6] The plaintiff claims that the three paintings constituted assets of the estate of Cynthia, in that each painting was given to Cynthia by Sidney Nolan at a date prior to Cynthia's death in 1976. It is common ground that the paintings, executed by Sidney Nolan, were originally his absolute property. [7] It is also undisputed that Sidney Nolan gave a number of his paintings to his wife Cynthia during their marriage, which, upon her death, constituted assets of Cynthia's English and Australian estates. Some of those paintings were distributed to Ms Jinx Nolan by the trustees of Cynthia's English and Australian wills in 1985 and 1986 respectively. Sidney Nolan was aware of, and did not dispute, the trustees' claim that those paintings constituted assets of Cynthia's estate. [8] It is undisputed that the three paintings the subject of this proceeding were in the possession of Sidney Nolan from (at the latest) a date in 1976 until his death on 28 November 1992. Upon the death of Sidney Nolan, his widow, Lady Nolan, took possession of the paintings. Subject to the outcome of the present 10 VR 626 at 633 proceeding, Lady Nolan acquired title to the three paintings pursuant to the will of Sidney Nolan executed on 6 February 1978, under which she was sole beneficiary. The trustees of Cynthia's estates and the plaintiff, Ms Jinx Nolan, have not, at any stage, been in possession of any of the three paintings. [9] The plaintiff contends, in essence, that she believed from a date prior to her mother's death in 1976 that "Hare in Trap" 1946 had been the property of her mother, Cynthia, and hence constituted an asset of her mother's estate, but she did not, until approximately September 2001, have proof of Cynthia's entitlement. [10] The plaintiff claims that until recently, she believed that "Italian Crucifix" 1955 was identical to a painting entitled "Crucifixion" 1955 or "Crucifixion, South Italy" 1955, which had constituted an asset of

Page 13 Cynthia's Australian estate, but had been sold by the trustees in 1983. [11] The plaintiff claims that she did not apprehend until approximately September 2001 that there were grounds to believe that the painting the subject of the present proceeding, entitled "Italian Crucifix" and sometimes entitled "Italian Crucifix, Puglia", was also the property of Cynthia during her lifetime. Her confusion is said to have arisen because Sidney Nolan painted a number of paintings entitled, or sometimes entitled, "Italian Crucifix" or a closely related variant of that title. The painting in dispute which remained in the possession of Sidney Nolan, is of different dimensions to the painting of similar title, which was sold by the trustees of Cynthia's Australian estate in 1983. The plaintiff contends that she only recently became aware that Cynthia had owned two paintings with a similar theme and title, only one of which was sold by the trustees of Cynthia's Australian estate, while the other remained in the possession of Sidney Nolan after Cynthia's death. [12] The plaintiff claims that she was not aware until shortly before the Sotheby's sale in September 2001 that there was evidence to establish that "Royal Hotel" 1948 was the property of Cynthia. [13] The recently discovered information which the plaintiff claims alerted her to Cynthia's entitlement, or to proof of Cynthia's title, and on which she relies to establish her claim in this proceeding, was identified or assembled by Mr Geoffrey Smith, a senior curator at the National Gallery of Victoria, in the course of his preparation for the National Gallery's projected exhibition of Sidney Nolan's "Australian Outback" works, scheduled for 2003. Mr Smith had conducted research into the life and art of Sidney Nolan for some years. His research into the provenance of Nolan paintings, including those the subject of this proceeding, continued during 2002. D. Brief outline of facts [14] Sidney Nolan was already an established artist when he married his second wife, Cynthia Hansen (ne Reed), in 1948. Soon after the marriage, Sidney Nolan adopted Cynthia's daughter, Jinx, who was then seven years of age. [15] In 1950 the Nolans travelled extensively in Europe and in 1953 they settled in England, in a residence situated at 79 Deodar Road, Putney. [16] Cynthia was closely involved in assisting Sidney Nolan with his work and in promoting his reputation. She was also the author of several books on themes based on her travels with Sidney Nolan. [17] It is undisputed that both Sidney Nolan and Cynthia Nolan owned Nolan paintings and made them available to various exhibitions. 10 VR 626 at 634 [18] During the course of the Nolans' marriage, a number of exhibitions of Sidney Nolan's works took place. [19] It is principally on documentation associated with certain of those exhibitions that the plaintiff bases her claim that Sidney Nolan made a gift of each of the three paintings to Cynthia. The plaintiff claims that:

2a) 2b) 1c)

"Italian Crucifix" 1955 was first acknowledged as belonging to Cynthia in the catalogue for the Whitechapel Art Gallery exhibition held in June and July 1957; "Hare in Trap" 1946 was first acknowledged as being in the collection of Cynthia in the catalogue for the New Metropole Gallery, Folkestone exhibition held between 21 February and 18 April 1970; "Royal Hotel" 1948 was first acknowledged as belonging to Cynthia in the catalogue for the Moderna Museet exhibition held in Stockholm between 17 January and 7 March 1976.

[20] The plaintiff relies upon the catalogues, including the above, and other documents containing alleged acknowledgments of Cynthia's ownership of the three paintings, in order to establish a valid gift. The catalogues and documents are discussed in detail below.

Page 14 [21] The plaintiff contends that Sidney Nolan participated in the preparation of the exhibition catalogues and in associated documents or correspondence. As such, it is asserted that acknowledgments contained therein constituted admissions, or proof of a valid gift of each of the three paintings by Sidney Nolan to Cynthia. [22] In 1958, Ms Jinx Nolan left England to attend boarding school in the United States. The United States has remained her permanent residence from that time up to the present. She nevertheless continued to visit her parents in England regularly and maintained her family bonds with both Cynthia and Sidney Nolan. [23] In 1974, Cynthia Nolan despatched 26 paintings to Australia pursuant to an alleged loan agreement dated 21 November 1974 between herself and the Power Gallery of Contemporary Art, University of Sydney, under the care of her friend or associate, the curator, Elwyn (Jack) Lynn. Those paintings included "Hare in Trap" 1946 and "Italian Crucifix" 1955. The paintings deposited with the Power Gallery were subsequently made available for the David Jones Art Gallery exhibition held in Sydney in 1975. In 1976, Cynthia and Elwyn Lynn (on her behalf) offered some of the 26 paintings for sale to the National Gallery. The paintings offered for sale included "Hare in Trap" 1946. The National Gallery did not take the opportunity to purchase any of the paintings. [24] The plaintiff acknowledges that Sidney Nolan did not know, at the time, that the paintings had been despatched to Australia, of Cynthia's arrangements with the Power Gallery or of the offer to sell some of the paintings to the National Gallery. [25] The plaintiff also conceded that Sidney Nolan did not know of, or consent to, the David Jones Art Gallery exhibition in 1975 and was upset when he subsequently learnt of it. [26] It is undisputed that Cynthia maintained a separate "business" address, care of Mrs J Griffin, 7 Sharples Street, Regents Park Road, London and required that her arrangements with the Power Gallery and the proposed sale of paintings be kept confidential. [27] There is also evidence that the alleged loan of paintings by Cynthia to the Power Gallery was in fact a private arrangement between Cynthia and Elwyn Lynn. That issue is discussed in detail below. 10 VR 626 at 635 [28] In 1976, Cynthia wrote at least two letters to Jinx Nolan in Boston. By a letter dated May 1976, Cynthia stated that she was considering sending "a few really good large ... paintings" to Jinx Nolan in America and "'Hare in Trap' came to mind". By a letter dated September 1976, Cynthia referred to her plan to send certain paintings to Jinx Nolan in Boston. The letter asserted that the paintings belonged to Cynthia, but urged that Sidney Nolan must not be informed, as he had apparently "given" paintings to Cynthia in the past, but had subsequently retracted or reclaimed such gifts and dealt with the paintings as his own. [29] On 24 November 1976, Cynthia committed suicide in London. Jinx Nolan was notified of her death and travelled to London immediately. Cynthia left two wills. By an English will executed on 13 February 1976 and an Australian will executed on 22 April 1976, each in very similar terms, she devised her estate to trustees on trust, broadly, for Jinx Nolan for life, with the remainder to the issue of Jinx Nolan or to certain heritage bodies. However, a "power of encroachment" permitted the trustees of the wills, in their absolute discretion, to pay the whole or any part of the capital of the estate to or for the benefit of Jinx Nolan. [30] Sidney Nolan was surprised and distressed to receive no benefit under either of Cynthia's wills. Shortly after Cynthia's death he began to reside at the home of the first defendant, Mary, Lady Nolan, then known as Mary Perceval, ne Boyd. [31] On 6 February 1978 he married Mary Nolan. [32] Despite some strain and distress over the terms of Cynthia's wills, Sidney Nolan maintained a relationship with Jinx Nolan until his death. They corresponded and Jinx Nolan visited, and stayed with, Sidney Nolan and Mary Nolan in their Whitehall flat. The topics of Cynthia's wills and the benefits they conferred on Jinx Nolan were a source of tension, which occasionally resulted in emotional scenes. In 1978, after a disagreement with Sidney Nolan while staying as a guest in the Whitehall flat, Jinx Nolan left a note to Sidney Nolan which stated:

Page 15

Sid Won't stay this time Am going to be rushing a bit. I'll be at Shepherds until late pm probably so might not be able to make the concert. Sorry if there are feelings re possessions. I didn't mean there to be, everything is yours as far as I'm concerned including anything at the warehouse or lawyers. I'll probably be off tomorrow but will phone before I leave. Love to Mary. Love Jinx. ps I made a couple of long distance phone calls (inland) think this should cover it.

[33] It is not disputed that following Cynthia's death, the three paintings remained in Sidney Nolan's possession until his death in 1992. "Hare in Trap" 1946 was displayed in the Nolans' Whitehall flat for at least part of that time. Jinx Nolan visited and stayed with Sidney Nolan and his third wife, Mary (now Lady Nolan), at their Whitehall residence on many occasions. She was aware that "Hare in Trap" 1946 was in Sidney Nolan's possession. She believed, during Sidney Nolan's lifetime, on the basis of the letter from Cynthia dated May 1976 that Cynthia had owned "Hare in Trap" but had no further proof of title. Further, she believed that "Italian Crucifix" 1955 had been owned by Cynthia, but had been sold by the Australian trustees of Cynthia's will during the 1980s. 10 VR 626 at 636 [34] Jinx Nolan gave evidence that she was anxious to preserve her relationship with Sidney Nolan and generally avoided discussion of Cynthia's wills or challenging him. She therefore, during Sidney Nolan's lifetime, did not raise specific questions about paintings or the possibility that there was property remaining in Sidney Nolan's possession which should have been included in her mother's estate. [35] In 1985, Jinx Nolan received a number of paintings as a distribution in specie from Cynthia's English estate. In 1986 she received a distribution of property, which apparently included some paintings, from Cynthia's Australian estate. [36] Following Sidney Nolan's death on 28 November 1992, Jinx Nolan, in 1994 and 1995, sought and obtained legal advice in relation to certain items which she believed to be assets of Cynthia's estate, but which had remained in Sidney Nolan's possession after Cynthia's death. [37] Jinx Nolan obtained further legal advice and representation. She asserted a claim to certain furniture and other items from the estate of Sidney Nolan. The claim was rejected. In the course of rejecting the claim, Diana Rawstron, a solicitor acting for the executors of the estate of Sidney Nolan, by letter dated 10 February 1995 wrote to Jinx Nolan's solicitor in the following terms:
I put this on the record because I wish to make the point that the executors' position is not to say that everything in Sir Sidney's possession at the date of his death automatically belongs to the estate. If anything belonged to Cynthia, then it has been or will be returned to Ms Nolan. However, the position of the Chinese chairs, screen and carpet is that they belonged to Sir Sidney and therefore fell into his estate. Finally, if Ms Nolan is able to produce compelling evidence to the contrary, for reasons you are aware of, it would be necessary to put the matter before the Inland Revenue.

[38] Although rejecting Jinx Nolan's claim to furniture, the executors of the estate of Sidney Nolan, with the approval of Lady Nolan, acknowledged that a painting by Sidney Nolan depicting a railway steam train, inscribed "Cynthia with love Sidney 1969" belonged to Jinx Nolan after it was discovered at a London art dealers in February 1993. The painting was returned to Jinx Nolan. [39] In 1997, the executors of Sidney Nolan's estate or Lady Nolan, instructed the London art dealer,

Page 16 Agnews, to sell a number of Nolan paintings, including the three paintings in dispute. The paintings were offered for sale by Agnews between 11 June and 25 July 1997 but were not sold. Ms Jinx Nolan became aware of the attempted sale. She sought further legal advice in relation to her claim to "Hare in Trap" 1946 and was advised that the evidence constituted by the letters of Cynthia to Jinx Nolan of May and September 1976 were insufficient to establish title. [40] In 2001, Mr Geoffrey Smith, in the course of research and preparation for a planned Nolan "Outback" exhibition scheduled for 2003, made contact with both Lady Nolan and Ms Jinx Nolan. He visited Lady Nolan. Mr Smith entered into regular communication with Ms Jinx Nolan and in July 2001 visited her at her residence in Boston. Ms Nolan made her own records available to Mr Smith and apprised him of other possible sources of documents. In the course of his subsequent researches, Mr Smith located certain documents and catalogues which led him to believe that "Italian Crucifix" 1955 (which the plaintiff believed was the title of a painting which had belonged to Cynthia but had been sold by the Australian trustees) was in fact a different painting of similar title, which had 10 VR 626 at 637 also been given by Sidney Nolan to Cynthia. He formed the belief, on the basis of certain documents, that Cynthia had also owned "Hare in Trap" 1946 and "Royal Hotel" 1948. [41] In the course of his investigations and research, Mr Smith advised Ms Jinx Nolan of his findings and of his opinion that there was evidence of Cynthia's ownership of "Hare in Trap" 1946, "Royal Hotel" 1948 and "Italian Crucifix" 1955 (which, unlike a painting of similar name, had not been sold by Cynthia's Australian trustees). [42] In September 2001, Lady Nolan instructed Sotheby's, the second defendant, to auction the three paintings in dispute. The plaintiff applied for an interlocutory injunction restraining the sale. The application for an interlocutory injunction was dismissed by Nathan J on 14 September 2001. The Sotheby's auction took place on 16 September 2001. The three paintings were sold at auction. The purchasers of "Hare in Trap" 1946 and "Royal Hotel" 1948 have executed undertakings to abide the determination of the court in this proceeding. The sale of the third painting, "Italian Crucifix" 1955 was not completed and that painting has been returned to Sotheby's by the purchaser. E. The situation of the paintings [43] There is evidence that "Hare in Trap" 1946 was situated in England in the Nolans' Putney residence at the date of Cynthia's death on 24 November 1976. There is evidence that "Hare in Trap" 1946 and "Italian Crucifix" 1955 were both despatched to Australia at an unspecified date in 1974 and remained there, stored at the Power Gallery, Sydney (save for when they were exhibited at the David Jones Art Gallery in Sydney between 7 and 26 July 1975) until at least June 1976. At a later date in 1976 (which I find to be prior to Cynthia's death on 24 November 1976) they were returned to England. [44] It is not disputed that "Hare in Trap" 1946 was also exhibited at the New Metropole Gallery, Folkestone, Kent, in April 1970. It is not disputed that "Italian Crucifix" 1955 was exhibited at the Redfern Gallery, London in 1955 and at the Art Gallery of New South Wales' Sidney Nolan retrospective exhibition from 13 September 1967 to 4 February 1998. There is evidence to suggest that it may also have been exhibited at the Wakefield Gallery, London, in about 1956 and at the Whitechapel Art Gallery, London, from 12 June to 31 July 1957. [45] It is not disputed that "Royal Hotel" 1948 was transported to England at an unspecified date (probably in the 1950s) and was exhibited at the Moderna Museet in Stockholm in 1976. [46] Other than for the above, there is no evidence of where each of the three paintings was situated during the marriage of Sidney Nolan and Cynthia from the 1950s until Cynthia's death in 1976. There is evidence that Sidney Nolan maintained a studio in London where paintings were kept. There is evidence that Nolan paintings were sometimes situated at the Nolans' residence, and were sometimes loaned to exhibitions or stored. However, there is no evidence, other than as noted above, of where each of the three paintings was situated at any given time. There is no evidence of what level of control, custody or access Sidney Nolan conferred on Cynthia in relation to the three paintings prior to the alleged gifts, whether they were situated

Page 17 at the Nolans' residence, in the studio, in storage, or elsewhere. 10 VR 626 at 638 [47] Such evidence, or the lack of it, may be relevant to the question whether the plaintiff has established that delivery, as distinct from donative intention or acknowledgment of ownership, was satisfied in relation to each of the three paintings. F. The pleadings [48] By statement of claim dated 13 September 2001 (filed immediately prior to the application for an interlocutory injunction restraining the auction of the three paintings by Sotheby's) the plaintiff alleged that she is the sole beneficiary of the estate of Cynthia. The plaintiff also alleged that the first defendant is the executrix of the estate of Sidney Nolan. [49] The plaintiff alleges that at the date of Cynthia's death, Cynthia was the owner of, and entitled to possession of, various Sidney Nolan paintings, including "Hare in Trap" 1946, "Royal Hotel" 1948 and "Italian Crucifixion" 1955. [50] The plaintiff alleges that the first defendant or her servants or agents are wrongfully in possession of and wrongfully detaining the three paintings. [51] The plaintiff pleads that the second defendant, Sotheby's, acting on the instructions of the first defendant, is proposing to put on public exhibition the three paintings as from Thursday, 13 September 2001 for the purpose of selling them on behalf of the first defendant by public auction on Sunday, 16 December 2001, and has publicly advertised the three paintings for sale in a sales catalogue which has been distributed to the public. [52] The plaintiff pleads that the second defendant has made false and misleading representations in contravention of s 52 of the Trade Practices Act 1974 (Cth) by representing to the public that the sale of the three paintings is being undertaken on behalf of the true owner, with the capacity to pass good title. The plaintiff also alleges that the first defendant's involvement in the second defendant's contravention of s 52 constitutes a contravention of s 75B of the Trade Practices Act. [53] The plaintiff alleges that she has been wrongfully deprived of the three paintings and has suffered loss and damage. By amended statement of claim filed on 16 December 2002, the plaintiff withdrew the allegations that she is the sole beneficiary of the estate of Cynthia and that the first defendant is the executrix of the estate of Sidney Nolan. Further, the plaintiff pleads that as a beneficiary under constructive or implied trusts, of which the first defendant or the second defendant is trustee by reason of matters pleaded in the reply, the plaintiff is entitled to full beneficial ownership and possession of the three paintings. [54] The plaintiff claims a declaration that she is the full beneficial owner of, and entitled to possession of, the three paintings, an order against the defendants for delivery up, orders for an injunction restraining the defendants and their agents or servants from dealing with the paintings without the plaintiff's consent, damages and costs. [55] By further amended defence dated 27 November 2002, the defendants deny that the first defendant ever has been or is the executrix of the estate of Sidney Nolan. [56] The defendants deny that, at the date of her death, Cynthia was the owner of and entitled to possession of the three paintings. [57] The defendants deny that the first defendant or her servants or agents are wrongfully in possession of or wrongfully detaining the paintings. 10 VR 626 at 639 [58] The defendants admit that the instructions from the first defendant were given on behalf of the estate of the deceased, of which the first defendant is the sole beneficiary.

Page 18 [59] The defendants say that the sale of the three paintings occurred on 16 September 2001, and admit that the second defendant put the paintings on public exhibition for the purpose of sale on behalf of the first defendant, and that they advertised the sale in catalogues distributed to the public. [60] The defendants admit that the second defendant represented that it was selling the three paintings on behalf of the first defendant, and that the first defendant warranted that the estate of the deceased was the owner of the paintings but say that the second defendant made no representations or warranties as to ownership of the paintings. The defendants state that the representations were true and deny contravention of the Trade Practices Act. [61] The defendants say that the paintings are in the possession of the respective purchasers, other than "Italian Crucifix" 1955 which is in the possession of the first defendant. [62] The defendants allege that the plaintiff's cause of action is statute-barred by the operation of s 6 of the Limitation of Actions Act 1958 and/or s 2 of the Limitation Act 1980 (UK). [63] Further, the defendants allege that at all material times from 1976 to 5 September 2001 the plaintiff has, by her conduct, represented herself as having no right, or title to or interest in the three paintings. [64] The defendants allege that the first defendant, induced by the representations and in the belief that Sidney Nolan had unfettered title to the paintings free of any claim by the plaintiff, acted to her detriment in that neither Sidney Nolan nor the first defendant sought to preserve evidence to refute the plaintiff's claims. Accordingly, the plaintiff is estopped from asserting that she has any right or title to, or interest in, the paintings. [65] Further, the defendants claim that in 1993, when the plaintiff made a claim against the estate and the first defendant for the return of all personal property alleged to form part of the estate of Cynthia, the plaintiff knew that she might have a claim to the three paintings and elected to abandon or agreed to resolve the claim upon delivery of certain items of property, not including the three paintings. [66] The defendants say that the three paintings were sold at auction on 16 September 2001. The purchasers have undertaken not to sell their respective paintings until the hearing and determination of this action and have agreed to deliver up the paintings to the plaintiff upon demand, in the event that the plaintiff is successful. [67] The first defendant seeks declarations, including declarations that she was lawfully entitled to sell each of the paintings through the second defendant, that the estates of Cynthia in the United Kingdom and Australia were wound up and fully administered on or about 11 March and 31 October 1985 respectively, and that at no time did any of the executors ever get in the three paintings so that they formed part of the estate of Cynthia prior to completing the administration of the estate. [68] The defendants allege that s 29 of the Administration and Probate Act 1958 prohibits the plaintiff from maintaining the proceeding. 10 VR 626 at 640 [69] Further, the defendants say that, during the lifetime of Sidney Nolan, the plaintiff elected to abandon all claims which she may have to any property in the possession of the Sidney Nolan, or to give such property which she may have claimed through the estate of Cynthia, to Sidney Nolan absolutely. [70] By second amended reply filed on 6 December 2002 the plaintiff alleges that the first conversion of the three paintings occurred between 11 June and 25 July 1997 (when they were offered for sale at Agnews) and that prior to the plaintiff's demands for delivery up on 5 September and 11 September 2001, there was no wrongful detention. [71] The plaintiff further pleads that pursuant to s 21 of the Limitation of Action Act and s 21 of the Limitation Act (UK) no limitation period applies to the plaintiff, as she is a beneficiary of various constructive or implied trusts of which the defendants are the trustees. [72] The first constructive trust is pleaded to have arisen when the first defendant took possession of the paintings through the estate of Sidney Nolan, on the basis that Sidney Nolan already held them as a

Page 19 constructive trustee, having taken possession of them knowing that he was not entitled to full beneficial ownership. [73] It is pleaded that the second defendant holds the three paintings as a constructive trustee, as it was put on inquiry by facts that would indicate to a reasonable person that a breach of trust may have occurred, prior to the auction on 16 September 2001. [74] The second constructive trust pleaded in the second amended reply is said to have arisen:
... by the plaintiff permitting Sidney Nolan and then the first defendant to have possession of the paintings when she was mistaken as to the evidence available to prove true title, or as to true title.

[75] Further, it is pleaded that the second constructive trust arose "when the first defendant and/or the second defendant subsequently gained the requisite knowledge of the mistakes or were put on inquiry by facts which would indicate to a reasonable person that the mistakes had or may have been made by the plaintiff". [76] Alternatively, it is pleaded that the second constructive trust arose when "the first defendant gained actual knowledge or was put on inquiry [by facts?] as would indicate to a reasonable person that a breach of trust had occurred by receipt of the paintings from Sidney Nolan's estate, or is now put on inquiry as to breach of trust". [77] The material facts relied on to establish the second constructive trust include an allegation that the three paintings comprised part of the residue of the estate of Cynthia. [78] As pleaded, a further precondition to the second constructive trust arising is the putting on inquiry of the first defendant (by facts?) which would indicate to a reasonable person that the mistakes or breach of trust had occurred or may have occurred. [79] In the alternative, it is pleaded that the second constructive trust arose when material now brought to the first defendant's attention in the form of the exhibition history put her on inquiry. [80] The third constructive trust is alleged to have arisen by reason of the first defendant declaring to the plaintiff that if any chattels belonged to Cynthia, and could be proven by evidence to have belonged to her, such chattels would be 10 VR 626 at 641 returned to the plaintiff. The third constructive trust is thus pleaded to have arisen on 10 February 1995, based on the letter of Diana Rawstron, solicitor for the estate of Sidney Nolan. [81] It is pleaded that the above term or obligation was departed from, in that the paintings were offered for sale at the Sotheby's auction on 16 September 2001 without notice being given to the plaintiff in reasonable time to enable her to obtain the proof, if it did exist. It is pleaded that the first defendant holds title to the paintings as a constructive trustee by reason of the above matters. [82] The plaintiff pleads that she did not have knowledge of all the relevant facts in relation to the ownership of the three paintings until shortly prior to the commencement of the proceeding and was not in a position to give informed consent to any abandonment or to undertake any election. G. The plaintiff's standing [83] A threshold question for determination in the proceeding is whether the plaintiff has standing to claim possession of the paintings or equitable entitlement pursuant to various constructive or implied trusts. If the plaintiff lacks standing, it will be unnecessary to determine whether the paintings were validly gifted to Cynthia and constituted assets of her estate, and, if so, whether the estate's claim was barred pursuant to limitations of action legislation, estoppel, waiver or like equitable doctrines. [84] The plaintiff's claim in this proceeding derives entirely from her status as a beneficiary under the two

Page 20 wills of her mother, Cynthia. [85] By her Australian will executed on 22 April 1976 Cynthia appointed Lily Lynn and Neil Robert Burns the executors and trustees of the will. By the Australian will, the estate was given, devised and bequeathed to the trustees to sell, pay debts and hold the residue of moneys and parts of the estate unsold upon trust for Jinx Nolan for life and thereafter for such of the children of Jinx Nolan as should survive her and attain the age of 21 years. In the event of no child of Jinx Nolan living to attain a vested interest, the trustees were to hold the residuary estate upon trust for the National Trust of Australia (NSW). [86] Clause 4 of the Australian will provides that:
... notwithstanding the foregoing trusts, the trustees may at any time and from time to time in their absolute and uncontrolled discretion make payments of the whole or any part of the capital of my estate to or for the benefit of my said daughter Mosca Gai Jinx Margaret Ellery Nolan.

[87] The trustees in 1984 sought counsel's opinion on whether cl 4 was valid. By a memorandum dated 19 December 1984 John Garnsey of counsel stated his opinion that it conferred a valid power of "encroachment", although conflicting authorities and uncertainty were noted. Mr Garnsey advised that the trustees should seek the directions of the Supreme Court in view of the uncertainty. [88] The trustees applied for directions as to whether the power in cl 4 was valid and whether they could properly distribute the whole, or any and what part of the residue of the estate to Ms Jinx Nolan, to the exclusion of the residuary beneficiaries or any one or more of them. [89] The matter was settled. The terms of the settlement are not before the court. The terms of any distribution to Ms Jinx Nolan are not before the court. It appears to be common ground that the distribution comprised all of the assets of Cynthia's Australian estate which were then ascertained. I am unable to 10 VR 626 at 642 determine whether the Australian trustees exercised their discretion to distribute to Jinx Nolan the entirety of the estate, including any choses in action (such as the right to issue proceedings to recover property of the estate) or whether the trustees, pursuant to the power conferred on them, distributed only specified items of property to Jinx Nolan. [90] The English will of Cynthia Nolan executed on 13 February 1976 appointed Victor Thomas Hadley and Kathleen Evelyn Griffin executors and trustees. [91] The English will was in similar terms to the Australian will. By cl 3, it provided that the income of the residuary trust fund would be payable to Jinx Nolan during her lifetime but that the trustees had power, at their absolute discretion, at any time and from time to time, to pay, transfer or apply to or for the benefit of Jinx Nolan the whole or any part or parts of the residuary trust fund, in such manner as the trustees should in their absolute discretion think fit. [92] By a deed of appointment dated 11 March 1985 the trustees of the English will, pursuant to cl 3(e), determined that the residuary trust fund consisting of those items referred to in an annexed schedule should be held for Ms Jinx Nolan for her own use and benefit, absolutely freed from the trusts of the will. The schedule lists 12 nominated paintings, 11 small paintings, items of jewellery and money. [93] The schedule comprised the entire known residuary English estate of Cynthia, but it did not include the three paintings in dispute. [94] The plaintiff contends that, properly construed, the deed of appointment operated to transfer to her, free of the trusts, the entire residuary trust fund of Cynthia's English estate, whatever it comprised. On that construction, the reference to the items in the schedule did not delimit the subject matter of the transfer but was simply an aid to identifying it. It is submitted that items which did constitute part of the residuary trust fund but were as yet unidentified due to mistake, would also be effectively transferred to Ms Jinx Nolan. [95] I do not accept that construction. The deed of appointment was made pursuant to the exercise of a

Page 21 discretion to transfer the whole or any part or parts of the residuary trust fund to Ms Jinx Nolan. The deed states that the "Residuary Trust Fund consisting of those items referred to in the Schedule" were to be held for Ms Jinx Nolan. It is not clear from the terms of the deed itself that the items listed constituted the whole of the residuary trust fund, although it is not disputed that, as a matter of fact, they did comprise the entirety of the assets then identified and known to be property of the estate. [96] I consider that the terms employed by the deed are apt to effect the transfer of only part of the estate. If the deed had been expressed to transfer the whole of the residuary trust fund, the schedule might then be viewed as merely descriptive, rather than delimiting and definitive. [97] I conclude that the deed of appointment dated 11 March 1985 was effective to transfer to Ms Jinx Nolan only those items listed in the schedule. Any items properly forming part of the residuary trust fund as at that date, but not then identified (including the three paintings in dispute if they constituted the property of Cynthia at the date of her death) were not transferred. It is a matter of speculation whether, had the trustees been aware of an entitlement of the estate of Cynthia to the three paintings, they would have formed an intention to transfer them and would have proceeded to do so. The attitude of the residuary beneficiary, the possibility of challenge to the disposition of the entire residuary trust fund, and the ultimate decision of the trustees in such circumstances, cannot be known. 10 VR 626 at 643 [98] I therefore conclude that if the three paintings then constituted assets of Cynthia's English estate, they would remain such, subject to possible bars based on limitation of actions legislation and like doctrines. As assets of the estate, they would remain subject to the trusts. The trustees would have legal title, and standing to sue in relation to the three paintings. They would be entitled to sell or to retain the paintings and would be obliged to apply any resulting income for the benefit of Ms Jinx Nolan as life tenant. However, unless the trustees exercised their discretion under cl 3(e) of the English will, upon the death of Ms Jinx Nolan, and in the absence of her issue, the English National Trust would take. [99] The paintings in dispute were not recognised as Cynthia's property at the date of her death and were therefore not included in inventories of either her English or Australian estate. [100] There is no evidence that "Royal Hotel" 1948 left England following the Nolans' settlement there, other than for the Moderna Museet exhibition in Stockholm in 1976. "Hare in Trap" 1946 and "Italian Crucifix" 1955 were despatched to Australia in 1974. They were stored at the Power Gallery, exhibited at the David Jones Art Gallery in July 1975 and subsequently returned to the Power Gallery. There is evidence that as at June 1976 "Hare in Trap" was still in Australia and that it was one of a number of paintings offered for inspection and sale to the National Gallery at that time. [101] However, Ms Jinx Nolan gave evidence that at the date of her mother's death she went immediately to London and visited the Nolans' Putney house, which had been sold, to clear out some possessions. Ms Jinx Nolan stated in cross-examination that it was her consistent recollection that "Hare in Trap" 1946 was in the Putney house at the time of her mother's death. Mr Vickery QC, senior counsel for the plaintiff, contended that Ms Jinx Nolan's evidence on that issue should not be accepted as supporting the conclusion that "Hare in Trap" 1946 was in England at the date of Cynthia's death, when viewed in the context of the questioning during cross-examination and its basis, as "the witness acceded to something which she should not perhaps have acceded to". [102] I consider that Ms Jinx Nolan's evidence that "Hare in Trap" 1946 was situated in the Putney house at the date of her mother's death was clear and considered. It was not elicited by confusing or obscure questioning. The evidence should be accepted. I find that, on the balance of probabilities, "Hare in Trap" 1946 and "Royal Hotel" 1948 (if property of Cynthia at the date of her death) comprised assets of Cynthia's English estate. [103] In relation to "Italian Crucifix" 1955, there is undisputed evidence that it was temporarily in Australia from 1974 until at least July 1975, as was the case with "Hare in Trap" 1946. On the balance of probabilities, I find that "Italian Crucifix" 1955 was returned to England at or about the same time as "Hare in Trap" 1946, arriving by the date of Cynthia's death. It thus (if property of Cynthia at the date of her

Page 22 death) constituted an asset of Cynthia's English estate. [104] The defendants, by further amended defence dated 27 November 2002, para 30, plead that the estate of Cynthia in the United Kingdom was wound up and fully administered on or about 11 March 1985 and that the estate of Cynthia in Australia was wound up and fully administered on or about 31 October 1985. By para 30(c), it is pleaded that at no time did the executors of the estates ever get in the three paintings, so that they formed part of the estate of Cynthia prior to completing the administration of that estate. 10 VR 626 at 644 [105] The plaintiff, by the second amended reply, para 24, admits the allegations in para 30, save that the estate of Cynthia in Australia was wound up and fully administered on or about 31 October 1986. [106] On the last day of trial, Mr Corrigan, counsel for the plaintiff, in response to the defendants' address in reply, submitted that the plaintiff's admission in para 24 of the further amended reply did not amount to an admission that the paintings never formed part of the estate, but simply an admission that the paintings did not form part of the ascertained or inventoried part of the estate. He sought to withdraw the admission if that construction were not accepted. That withdrawal was opposed. [107] I consider that the fundamental basis of the plaintiff's claim, as pleaded, is that the three paintings did form part of Cynthia's estate, albeit unascertained. The admission, taken in context, does not constitute an admission that the paintings never at any stage constituted assets of Cynthia's estate. [108] On the basis that the three paintings were Cynthia's property and assets of her estate, legal title would vest in the trustees. The right to possession would also vest in the trustees. Under the trusts of the wills, the plaintiff had an equitable life interest not in any particular asset but in the residuary estate constituting the proceeds of sale, together with any assets left unsold. There was also the possibility that the trustees would exercise their discretion in relation to particular assets or sums in her favour, pursuant to the power of "encroachment" conferred by the terms of the Australian and English wills respectively. [109] I find that the three paintings, if the property of Cynthia at the date of her death, formed part of the English estate and title to the paintings was not transferred to the plaintiff by the deed of appointment dated 11 March 1985. [110] The plaintiff, by amended statement of claim filed 16 December 2002 seeks, inter alia, a declaration that she is the full beneficial owner, and entitled to possession, of the paintings, together with orders for delivery up to her of the paintings. [111] It is undisputed that the trustees of both the English and Australian wills ceased to act in the mid1980s. Until recently, it was assumed that all property of the estate of Cynthia was distributed to the plaintiff. However, on the basis of my findings, the three paintings, if assets of Cynthia's estate, remain subject to the trusts. The plaintiff would not be entitled to possession, or to full beneficial ownership. There is no evidence that any of Cynthia's trustees has been approached and requested to initiate proceedings in relation to the paintings. [112] Prima facie, the English trustees would have legal title and the right to possession of the paintings (if they were assets of the estate). They would have standing to sue for the relief sought in this proceeding. 1 [113] The alleged wrong in the present instance is a denial of title. As I have found that the plaintiff would have neither title nor an immediate right to possession to the three paintings, she would not, in the ordinary course, have standing to sue for the relief claimed.2 [114] However, in exceptional circumstances, a beneficiary may sue to enforce the trustees' right of action against third persons for injury to the trust property. In such circumstances, the trustees should be joined as defendants to the proceeding. 10 VR 626 at 645 [115] In Lamru Pty Ltd v Kation Pty Ltd3 Cohen J permitted a beneficiary to sue on the trustees' right of action, due to two exceptional circumstances. First, the trustees had considered that they had neither the obligation nor the power to sue and had indicated that the beneficiary himself should do so. Further, at the

Page 23 time of the hearing of the action, the trustees had completed the sale, distributed the proceeds and received their remuneration, and could be considered discharged. Having neither the status of trustee nor funds, they could not be expected to sue. [116] Cohen J relevantly stated:4
In most circumstances trustees are the proper plaintiffs in any claim involving rights or property of the trust. They can accordingly sue for any breach of or to enforce those rights. If they fail to take steps to enforce the rights of the trusts then the beneficiaries can bring proceedings against them for failure to carry out their duties. It used to be the almost invariable rule that the beneficiaries had only that right of action and could not commence any proceedings themselves. This strict rule has been modified over a long period of time ... It was said that the rule is that a beneficiary may sue in his own name only where the relief sought is in the equitable jurisdiction of the Court and even then only when the circumstances are exceptional. If they are not exceptional or if the proposed action is to be commenced in the common law jurisdiction the beneficiary's only remedy is to sue the trustee for the execution of the trust. Where proceedings are brought by the beneficiary in the circumstances referred to, the trustee and other beneficiaries should be added as defendants.

[117] His Honour referred to the decision of Finn J in Lidden v Composite Buyers Ltd5 and stated:6
That involved a claim by beneficiaries under a unit trust where it was said that the relief sought was variously under statute, at common law and in equity. His Honour considered (at 563) whether the claim could only be made in respect of equitable relief and he expressed the view that even if there were no authority he would have been inclined to the view that the relief sought under statute and at common law could be made where there is a Judicature Act system. His view was supported by a statement in Scott & Fratcher, The Law of Trusts, 4th ed (19871991) as being the American view, which was supported by what had been said in the Privy Council in Vandepitte v Preferred Accident Insurance Corp of New York [[1933] AC 70]. Finn J noted that a view to the like effect was contained in comments of the Privy Council in Hayim v Citibank NA [1987] AC 730 at 748. He accordingly stated that provided that the exceptional or special circumstances requirement of the rule is met, it is not necessary in a Judicature Act system that the relief be solely equitable. ... I share the opinion of Finn J that the exceptional circumstances which permit a beneficiary to bring proceedings apply to claims in common law as well as those in equity. In the present case the trustees at various times suggested that they had no power to lease the warehouse. They were incorrect in that opinion but that is not presently relevant. Shortly before the time of the completion of the sale, on 4 March 1998, the solicitors for the plaintiff sought to have the trustees require that the first defendant account for 40 per cent of the mesne profits. That was the same date upon which the plaintiff's notice of motion for mesne profits was filed. The solicitors for the trustees wrote in response, saying that their clients had no obligation or power under the existing orders to pursue the recovery of mesne profits from Nortex Co and that this should be done by the plaintiff. This attitude would in my opinion justify the finding of special 10 VR 626 at 646 circumstances but there is a further matter, and that is that the trustees have now completed the same and I assume that they distributed the proceeds and received their remuneration. If so, they would now be discharged from the trusts upon which they were appointed. They are no long trustees. This may not prevent them from bringing proceedings but without funds and with no existing status they could not be expected to do so. This adds to the circumstances which I consider to be exceptional or special so as to entitle the plaintiff to make a claim as to its share of mesne profits. The trustees have now been joined as defendants and they submit to any orders which may be made.

[118] In Re Atkinson (deceased),7 Gillard J recognised that although a beneficiary of the residue of an unadministered estate has no proprietary interest in any particular asset of the estate, in circumstances where the trustees defaulted in their duty to get in the trust estate and to enforce the testator's right, title or interest in relation to property, or were excused from bringing proceedings to do so, in the absence of any action by the personal representatives "the beneficiary has the right of remedy to assert the estate's right of property". His Honour emphasised that "the basis of such proceedings is that they are taken on behalf of the estate and if they are successful, they can only result in the lost property being restored to the estate for use in the due course of administration". [119] In the present case, it is common ground that Cynthia's English and Australian estates are wound up

Page 24 and fully administered save for the three paintings, if they are assets of the estates. The trustees of both the English and the Australian wills may be considered discharged. [120] It follows that exceptional circumstances exist which would justify the plaintiff as a beneficiary suing on the trustees' right of action. However, the trustees have not been joined, so the proceeding is irregularly constituted. If I find that the paintings constitute assets of the estate of Cynthia, the plaintiff will be entitled to any relief or remedy only for the benefit of the testamentary trusts and not in her own right. H. Gifts of chattels [121] There are three recognised methods for making a valid gift of a chose in possession, such as a painting, inter vivos. [122] They are:

3a) 3b) 2c)

deed declaration of trust delivery.

[123] In the present case, the plaintiff does not assert that a gift was effected by deed or declaration of trust. No deed has been identified or pleaded. Although various constructive trusts are pleaded, they are relevant only in reply to defences of limitations legislation and delay. They depend, for their effect, on the prior establishment of a valid gift to Cynthia by Sidney Nolan. [124] In establishing a valid gift of a chose in possession inter vivos, which is fundamental to her claim in this proceeding, the plaintiff encounters several significant hurdles represented by well-recognised principles and maxims applicable in this context. [125] First, it is well established that equity will not assist a volunteer. From that flows the equally venerable principle that equity will not complete an imperfect gift. 10 VR 626 at 647 [126] Secondly, possession is prima facie evidence of property. As Isaacs and Rich JJ observed in Russell v Wilson:8
Possession, in the relevant sense, is not merely evidence of absolute title: it confers a title of its own, which is sometimes called a "possessory title". This possessory title is as good as the absolute title as against, it is usually said, every person except the absolute owner.

[127] Limitation of action legislation reflects the policy that lengthy possession must ultimately operate to preclude a remedy in relation to a title, "however clear and indisputable", when a title holder comes "too late". The legislation recognises the public's interest in having "a certain fixed period, after which the possessor may know that the title and right cannot be called in question" in order to avoid an opening to "interminable litigation, exposing parties to be harassed by stale demands, after the witnesses of the facts are dead, and the evidence of the title lost".9 [128] In the present case, Sir Sidney Nolan and the first defendant, Lady Nolan, as his beneficiary, have successively been in continuous peaceable possession of the disputed paintings for an unbroken period of approximately 27 years. The "witnesses of the facts" of the alleged gift transactions are dead. [129] Thirdly, the plaintiff bears the onus of establishing the necessary elements of a gift of chattels effected by delivery. The presumption of advancement, or absolute gift, applies in favour of, inter alia, a wife who takes legal title to property for which a husband provided the purchase price.10 In such circumstances, it is a rebuttable presumption that the husband intended to advance the wife by way of gift, rather than intending her to hold legal title as a resulting trustee, for himself. The plaintiff sought to rely on authority in which the presumption of advancement was approved. The present case, however, involves an

Page 25 alleged common law gift of chattels, to which presumptions of advancement or resulting trust are equally inapplicable. [130] The plaintiff also contended that the fact that Sidney Nolan made many undisputed gifts of his paintings to Cynthia demonstrated a propensity on his part to make such gifts, which should assist the plaintiff in the present case. In my opinion, the fact that Sidney Nolan made many gifts to Cynthia which he did not dispute during her life or after her death, is more consistent with the conclusion that he did not make gifts to his wife of those paintings he retained after her death. There is evidence that Sidney Nolan was upset by the terms of his wife's wills, under which he took no benefit. Nevertheless, he made no attempt to challenge Cynthia's estates' entitlement to a considerable number of paintings. Such conduct suggests that Sidney Nolan "honoured" gifts and recognised them as binding. [131] The essential elements of a valid gift of a chattel inter vivos, in the absence of a deed of gift or a declaration of trust, are:

4a) 4b) 3c)

an intention to make a gift, usually expressed by words of present gift; intention on the part of the donee to accept the gift; and delivery. 10 VR 626 at 648

Intention to make a gift [132] Donative intention is characteristically accompanied by words of gift which evince the intention and delineate the object and extent of the intended benefaction.11 [133] The plaintiff in the present case, although reliant on a valid gift, is unable to produce any witnesses to the alleged gift transactions. Instead, reliance is placed on documents, the admissibility of which is largely disputed. Those documents, to the extent to which they contain admissible statements, must be approached not only with the degree of caution generally applicable to claims against a deceased estate, but with added caution based on circumstances peculiar to the present case, discussed in detail below. Are words of gift essential? [134] The documents on which the plaintiff relies contain statements which, even if admissible, do not amount to words of present gift by Sidney Nolan. [135] Many of the decided cases have involved undisputed "words of present gift". It was submitted by the plaintiff that words of gift are not required provided that donative intention is established. The issue has not received detailed consideration in any of the authorities of which I am aware. [136] This method of effecting a gift of chattels is commonly characterised as "delivery".12 [137] In many of the cases, however, reference is made to a "parol gift" or a "gift by word of mouth".13 The question arises whether words of gift are an essential constituent of this method. It is clearly established that donative intention and delivery are required. In most decided cases, words of gift have been undisputed or appear to have been assumed. Argument has centred on whether the requirement of delivery was satisfied. In In re Cole (a bankrupt); Ex parte The Trustee of the Property of the Bankrupt14 the Court of Appeal appeared to assume that "words of gift" must be spoken. Words of gift had indisputably been spoken in that case, so the effect of the absence of words of gift was not addressed. Recently, in Horsley v Phillips Fine Art Auctioneers Pty Ltd,15 Santow J expressly stated that oral words of gift with delivery were required. The plaintiff's submission, however, draws support from the observation of Mason CJ and McHugh J in their joint judgment in Corin v Patton16 that "Just as a manifestation of intention plus sufficient acts of delivery are enough to complete a gift of chattels at common law, so should the doing of all necessary acts by the donor be sufficient to complete a gift in equity". Corin v Patton did not concern a gift of chattels, but a voluntary transfer of an interest in Torrens land. The observation is therefore obiter. [138] If donative intention and delivery only are essential for a valid gift of chattels, that intention must

Page 26 nevertheless be made manifest and expressed with certainty. Words of present gift show "an intention to give over property to another, and not 10 VR 626 at 649 to retain it in the donor's hands for any purpose, fiduciary or otherwise".17 Words of gift are usually necessary to achieve that certainty in relation to matters such as defining the extent of the benefit the donor intends to confer. [139] Nevertheless, in my opinion, the better view, as expressed in the dictum in Corin v Patton, is that donative intention need not be manifested by words of gift. Although donative intention would normally be manifested, and its extent defined, by words, unusual circumstances may be imagined where other means fulfil those functions. [140] If a valid gift may be effected without words of gift in unusual cases, the putative donee who seeks to rely on alternative means of establishing donative intention, would bear the onus of proving the existence of a present, unequivocal donative intention, attended by the requisite certainty as to object, extent, and whether the gift would take immediate effect. [141] The question is relevant to the present case, because, in contrast to most decided cases, the plaintiff adduces no evidence of words of present gift. Rather, statements in the documents on which the plaintiff relies constitute, at their highest, ex post facto admissions or acknowledgments by Sidney Nolan, the alleged donor, that a particular painting belongs to Cynthia, is "Cynthia's" or is part of "Cynthia's collection". [142] In my opinion, evidence that Sidney Nolan believed that he had made a gift to Cynthia of an absolute interest, which had already taken effect and which he did not desire to retract, would be capable of manifesting donative intention. A comparable case is that of In re Ridgeway; Ex parte Ridgeway,18 in which the alleged donor apparently believed that he had made a gift of port to his children and thereafter acknowledged the port's reputation as "Tom's port" or "Alice's port". It was apparently accepted in Re Ridgeway that the putative donor intended to make a gift and believed that he had done so. That belief was found to be mistaken as a matter of law, because the essential requirement of delivery was not fulfilled. The port remained within the father's possession in the cellar. The gift, although intended, was held to be incomplete and equity will not perfect an imperfect gift. [143] Further, although a putative donor's acquiescence in an ascription of ownership to the donee may, in my opinion, constitute evidence that donative intention existed at a particular time, it may be more equivocal than words of present gift. Where the donor or donee is available to give direct evidence of the matter, any ambiguity or doubt may be resolved. That is not possible in the present case. [144] A further problem which arises in the present case in relation to the plaintiff's reliance on the alleged donor's apparent acknowledgment of the alleged donee's ownership is that, although delivery can precede, accompany or follow the gift, delivery must occur while the donative intention subsists. At any stage until delivery occurs, the donor can validly retract the gift. [145] The authorities establish that a promise to make a gift, or an expression of gift by words of future intention, however clear and unqualified, is not sufficient to establish a perfect gift. It follows that the donor's expression of belief or conclusion that he or she has made a gift which has taken effect, so that property has passed to the intended donee, is equally insufficient. At best, it satisfies only 10 VR 626 at 650 the first requirement of a valid gift of chattels. It manifests donative intention. The second necessary element of delivery must also be satisfied in order to give complete effect to the donative intention. That is a question of law which the putative donor rarely addresses and would usually be unqualified to determine, when expressing a conclusion that property in the chattel had passed to the donee. Thus in Re Ridgeway, the intending donor believed the gift of port complete, denominating it "Tom's port". In The National Trustees Executors & Agency Co Ltd v O'Hea19 the intending donor undoubtedly intended to make the gift of a coach and horses to his coachman, and believed it valid. In neither case was the intending donor's conclusion correct. Delivery had not been effected and the intended gift failed.

Page 27 I. Circumstances relevant to weight Claims against deceased estates [146] In the present case, both the alleged donor and the alleged donee are dead, the donee for nearly 30 years. In seeking to discharge the onus of establishing the necessary elements of a perfect gift, the plaintiff must rely on documents, rather than on oral testimony which may be tested by cross-examination. Where the alleged donor is dead, the authorities require the claimant donee's account of events to be approached with caution. Where both the alleged donor and donee are dead, and reliance is placed on documents, caution is particularly necessary. [147] In Re Garnett; Gandy v Macaulay20 Brett MR observed:
The law is that when an attempt is made to charge a dead person in a matter, in which if he was alive he might have answered the charge, the evidence ought to be looked at with great care; the evidence ought to be thoroughly sifted and the mind of any Judge who hears it ought to be, first of all, in a state of suspicion.

He nevertheless noted that:

... if in the end the truthfulness of the witnesses is made perfectly clear and apparent, and the tribunal ... believes them ...

their evidence could be accepted. [148] In Thomas v The Times Book Co,21 Plowman J applied the approach of Brett MR in a case where the poet, Dylan Thomas, had died shortly after allegedly making a gift of the manuscript of his poem "Under Milk Wood" to a BBC executive. Plowman J stated:22
[N]ot only in this case is the onus of proof on the defendants, but I am enjoined by authority to approach their story with suspicion having regard to the fact that the other actor in this story, the late Dylan Thomas, is dead and cannot therefore give his own version of what took place.

[149] Plunkett v Bull23 involved an action for debt against a deceased estate. Isaacs J noted that the plaintiff bore the burden of establishing "the original creation" of the deceased's indebtedness and stated: 24
[U]ndoubtedly it is established in cases of this sort the Court scrutinizes very carefully a claim against the estate of a deceased person. It is not that the Court looks 10 VR 626 at 651 on the plaintiff's claim with suspicion and as prim facie fraudulent, but it scrutinizes the evidence very carefully to see whether it is true or untrue.

[150] Recent decisions of this court have reiterated the need for caution, if not suspicion, in determining claims made against the estate of a deceased person. In Stick-on Signs Pty Ltd v Sign Gear Pty Ltd,25 Osborn J observed the caveat of Isaacs J in Plunkett v Bull. [151] Similarly, Hansen J in Richardson v Armistead26 stated that:
In such circumstances the self-interest of a claimant to give evidence favourable to his or her case is obvious ... in such a case much caution is exercised before the evidence of the claimant is accepted.

[152] In Plunkett v Bull and Thomas v The Times Book Co, in contrast to the present case, one party to the alleged transaction was still alive and gave evidence which, although scrutinised with due caution, was believed and accepted by the trial judge.

Page 28 [153] In addition to the caution generally appropriate to claims against the estate of a deceased person, the defendants in the present case point to several additional circumstances which may independently dictate a cautious approach. [154] In particular, the defendants submit that many of the documents on which the plaintiff relies have been selectively produced from a source which was assembled and deposited surreptitiously, so that there can be no confidence that all relevant documents have been brought forward. [155] In Plunkett v Bull Isaacs J cited with approval some observations of the Privy Council in Lachmi Parshad v Maharajah Narendro Kishore Singh Bahadur27 in relation to the sufficiency of proof of claims against deceased estates. Lord Morris there stated: 28
In an action brought to recover money against an executor, or, as in this case, the heir, of a deceased person, it has always been considered necessary to establish as reasonably clear a case as the facts will admit of, to guard against the danger of false claims being brought against a person who is dead and thus is not able to come forward and give an account for himself.

[156] Isaacs J, in Plunkett v Bull,29 referred to the failure of the claimant in Lachmi Parshad "to bring forward evidence which he ought to have brought forward, and which was available" which had contributed to the Privy Council's holding that a reasonably clear case was not established. Isaacs J observed that in Plunkett "it has not been suggested, and on the facts before us I do not see how it could be suggested, that any further evidence could be given or any further light thrown upon the case from the plaintiff's side".30 [157] Many of the documents upon which the plaintiff relies in the present case are produced from an archive known as "the Cynthia Nolan Papers" which was given to the National Library of Australia by Cynthia in successive consignments during 1975 and 1976. Cynthia apparently deposited the papers in circumstances of some secrecy. She placed a 45 year restriction on public access to the Cynthia Nolan Papers. 10 VR 626 at 652 [158] The defendants further submit that Cynthia's despatch of paintings to the Power Gallery of Contemporary Art, University of Sydney, in 1974, her arrangements with the curator, Elwyn (Jack) Lynn, and the exhibition at the David Jones Art Gallery in 1975, were concealed from Sidney Nolan and occurred without his consent, so that associated documents created by Cynthia or as a result of information she supplied should not be admitted, or alternatively, should be viewed with suspicion. [159] The defendants also submit that Cynthia's conduct, as evidenced by her letters to Jinx Nolan dated May 1976 and September 1976, represents an additional ground for declining to admit documents on which the plaintiff seeks to rely. [160] The defendants further submit that information included in exhibition catalogues is of variable reliability, depending for its accuracy on the information supplied to the compiler. [161] I consider each of those matters in detail below. The Cynthia Nolan Papers [162] Many of the documents on which the plaintiff seeks to rely in this proceeding are produced from a collection known as "the Cynthia Nolan Papers" held by the National Library of Australia. The Cynthia Nolan Papers consist of a considerable volume of papers related to Sidney Nolan, Cynthia and their circle, donated by Cynthia in successive consignments to the Australian National Library between 1975 and 1976. The last consignments were apparently received by the National Library shortly after Cynthia's death in November 1976. [163] The defendants rely on several documents which, in their submission, establish that Cynthia donated and delivered the papers after having taken elaborate precautions to conceal her actions from Sidney Nolan.

Page 29 The defendants also contend that the documents on which the plaintiff relies have been produced erratically and selectively. They contend that, in the circumstances, the court can have no confidence that the plaintiff has brought forward all available evidence. It is submitted that that circumstance constitutes a ground for rejecting documentary evidence on which a claim against a deceased person's estate is based. [164] The defendants tender a series of papers passing between the officers of the National Library of Australia, Ivan Page (Chief Liaison Librarian, Europe, at the Australian High Commission) and Cynthia, which indicates that Cynthia, in 1975, offered to donate a collection of Nolan papers to the National Library of Australia. [165] The correspondence indicates that the National Library's representatives were instructed to communicate with Cynthia care of Mrs J Griffin, 7 Sharples Street, Regents Park Road, London. Ms Jinx Nolan gave evidence that Cynthia used that address as a business address. [166] The donated papers were to be documented by "confidential file", which was to be "kept under lock and key". [167] Cynthia requested that the papers should not be looked at or opened by library personnel. The correspondence was conducted care of Cynthia's business address. National Library representatives agreed to her stipulation of a 45 year period of restricted access, assuring her that the confidential nature of the collection would be strictly respected. [168] A letter from Mr Page to Ms Pauline Fanning (a library officer) dated 14 January 1976 stated that: 10 VR 626 at 653
I shall be grateful if you will send another letter of thanks to Mrs Nolan when you receive these papers. Mrs Nolan would prefer that we did not call this gift simply "the Nolan papers". She said that it includes her own literary manuscripts. Further, if it were not for her, her husband would not be as famous as he is today, nor would the National Library ever have acquired the papers. She proposed therefore that the gift be named after herself. I did not catch all her names ... Perhaps in your letter to her you could refer to them as the Cynthia Nolan Papers. Mrs Nolan does enjoy a certain reputation for eccentricity. Her husband knows she is transferring papers to the library, but she does not want him to see documents leaving the house. She therefore asked me to call at a time when he was out. After putting the cartons into the car I was sitting in the kitchen taking tea with her. A footstep was heard on the stairs. Mrs Nolan flew out to intercept her husband, explained loudly that she was having a cup of tea with someone she had picked up in the park, and persuaded him to continue on his way upstairs. Back in the kitchen she thrust my overcoat into my hands, whispered "I'm always picking up people in the park" and turned me out of the house. I felt as if I was playing a scene from a farce by Feydeau.

[169] An undated letter from Cynthia to Dr Chandler, Director-General of the National Library, states, "Your poor journeyman almost ran into Mr N last time -- not that it would matter for he knows I'm sending things to archives, but experience has taught me better not to involve him ...". [170] After the death of Cynthia, Mr Page wrote to an officer of the National Library by letter dated 5 January 1977, in which he advised against the library's acknowledgment of some recently arrived consignments. It further stated:
Mrs Nolan always assured me that her husband knew the papers were going to the National Library but she took elaborate precautions to ensure that he knew not the day nor the hour of it. I suggest we do nothing at this stage to bring them to the forefront of his mind.

[171] From 11 to 13 October 2002, Mr Smith was given access to the Cynthia Nolan Papers. Mr Smith examined the Cynthia Nolan Papers in the company of Ms Jinx Nolan and her instructing solicitor, Mr Gary Singer, during a three day period. Mr Powell of the National Library gave evidence that that was the only occasion on which, to his knowledge, the Cynthia Nolan Papers have been examined. [172] Mr Smith's evidence was that the Cynthia Nolan Papers constitute "a huge archive". The collection consists of 19 different series of documents (classified by reference to topic) contained in approximately 90

Page 30 boxes. Mr Smith did not look at all 90 boxes. He could not remember all of the series of documents he had looked at. He thought that he had looked at some and "scanned" others. He was sure that he had looked at some series, sure that he had not looked at some series and unsure whether he had looked at others. Mr Smith was unable to state exactly how many of the 90 boxes he had looked at, other than to say that it was "a lot". He did not keep a note of what he had looked at and had no record of his examination, except where he had taken copy documents. [173] Mr Singer, by affidavit sworn 9 December 2002, deposed in relation to his search of the Cynthia Nolan Papers from 11 to 13 October 2002 that "there were literally tens of thousands of documents in the collection", and "time did not permit us to examine every paper in the collection". [174] The correspondence passing between National Library representatives and Cynthia should be approached with some caution because, as in the case of the documents relied on by the plaintiff, the authors are not available to give evidence. Nevertheless, I consider that the correspondence supports the 10 VR 626 at 654 contention that the Cynthia Nolan Papers is a collection which was not assembled or donated by Cynthia openly with the full knowledge, consent, and participation of Sidney Nolan. [175] Cynthia's conduct, as described in the correspondence, appears inconsistent with Sidney Nolan's knowledge and approval of her actions. It was not limited to "not bothering" the artist, but extended to deceit. In my opinion, it is probable that Sidney Nolan did not know of, or consent to, the assembly or the donation of the Cynthia Nolan Papers, despite the written assertions of Cynthia Nolan to the contrary. There can be no confidence that the Cynthia Nolan Papers constitutes a comprehensive source which contains a complete record of all relevant matters, that all relevant papers were available to Cynthia or that she did not filter, censor or remove material selectively for purposes of her own. [176] In relation to the search of the Cynthia Nolan Papers conducted by Messrs Smith and Singer and Ms Nolan, whilst I do not consider that any of those persons would be likely deliberately to suppress or withhold relevant documents, given the size of the collection, the relatively short space of time allotted for their search, the admitted impossibility of examining all papers, the failure to keep any written record of the search process and the lack of access afforded to any other party, it is not possible to conclude that a thorough and comprehensive search was conducted. [177] In the circumstances, neither the Cynthia Nolan Papers as a collection, nor the search of it in October 2002, can safely be considered comprehensive. I cannot conclude that the plaintiff has brought forward all relevant documents. While I do not consider that documents produced from the Cynthia Nolan Papers should therefore be rejected, the circumstances add to the necessity for a cautious approach to the documents in this context.31 The difficulty of establishing "a reasonably clear case" is also increased. The Power Gallery arrangements and the David Jones Art Gallery exhibition [178] It is not disputed that Cynthia, on a date in 1974, arranged for the despatch of 26 Nolan paintings to the Power Gallery of Contemporary Art, University of Sydney. Documents relevant to Cynthia's arrangements for the deposit of paintings at the Power Gallery are tendered by consent. [179] By letter dated 3 September 1974 Elwyn Lynn of the Power Gallery wrote to Cynthia, at her business address, care of Mrs J Griffin, 7 Sharples Street, Regents Park Road, London. The letter refers to the expected unloading of two crates (of paintings), their expected collection and the university's exemption from duty and customs charges. [180] It further states:
At present only I, Lily [Mr Lynn's wife], my secretary and my assistant and legal and customers agents are aware of the consignment ... I shall supply you with a list and a statement that they are on loan from you. This will also be entered in our files and I think it wise to give a copy to the Vice Chancellor for his confidential files. I think it wise to have the documents stored in several confidential files.

Page 31 [181] By letter from Elwyn Lynn to Lily and Victoria Lynn dated 14 November 1974 Mr Lynn states:
10 VR 626 at 655 Sid met me and all is well ... of course, he had guessed intuited or suspected about the paintings, but now he knows and Cynthia knows he knows. I walked on a bomb field for a while but all is well and it just had to come out and the sooner the better. We are all at peace ...

[182] A letter from Elwyn Lynn (then visiting England) to Anne Bryant of the Power Gallery dated 18 November 1974 refers to his despatch of some additional Nolan works, including a sketch, recently drawn by Sidney Nolan expressly for the Power Gallery. The letter indicates that Sidney Nolan intended to give certain prints to the Power Gallery. [183] The letter adds:
Sid Nolan doubts if any ptgs [paintings] are in Australia from Cynthia! She's got a lot in her room! Wants to give some to Manchester and Edinburgh, but where is our original. The whole business is quite messy and a great worry to me to keep the peace -- takes the enjoyment away.

[184] A letter from Elwyn Lynn to Cynthia dated 1 June 1975 refers to a proposal to offer one-third (or six) of the 26 paintings for sale to David Jones. It also referred to a proposed gift of a painting by Cynthia to Lily Lynn. [185] A letter from Lily Lynn to Cynthia dated 9 September 1975 acknowledges Cynthia's gift of a painting to Lily Lynn. The letter refers to Cynthia's problems, and states:
I fear by some "Irish luck" the paintings will somehow return to London and McAlpine. It is all difficult and a wrong decision could cause a lot of anger and tears ... As Jack and I talked about you, Sid rang from London. A private deal would be better. But who should do it? The few collectors we know are all private dealers themselves and sharks as money is tight.

The Mollison letters [186] Two letters to James Mollison, then Director of the National Gallery, Canberra, are tendered by consent. The plaintiff submits that they constitute evidence that the Cynthia Nolan collection of paintings (including "Hare in Trap" 1946 and "Italian Crucifix" 1955) remained in Australia until at least June 1976. [187] The letter from Cynthia Nolan to James Mollison, dated 28 May 1976, states that "I would very much like you to see the paintings that I own. I hope that you might find something that your gallery would like to purchase." The letter requests Mr Mollison, if interested, to get in touch with Jack Lynn, who would show him the paintings. The letter requests Mr Mollison to contact Cynthia not at the Putney residence she shared with Sidney Nolan, but at her business address "care of Mrs J Griffin" in Regents Park, London. It also requests that the matter "remains at the moment between ourselves". [188] The letter from Elwyn (Jack) Lynn to James Mollision dated 10 June 1976 refers to the possible purchase by the National Gallery of works by Sidney Nolan "at present stored by me at The University of Sydney" and available to be shown "at any time". Mr Lynn states "I am compelled to request that the matter be kept confidential". Listed as one of the available paintings is "Hare in Trap" 1946. Although a painting entitled "Crucifixion, South Italy" 1955, dimensions "50.8 60.9 cm" is also listed, its measurements do not accord with those of the similarly titled painting the subject of this proceeding. [189] The letter from Elwyn Lynn to Cynthia Nolan dated 21 June 1976 states:
Meanwhile I have written to James Mollison ... listing the works, sizes, dates, media and so on that are available:

Page 32
eleven with a choice of six (6). I told him that he and/or 10 VR 626 at 656 his committee could see them by arrangement, but I've not said where they are. I've told him that I am not an agent, but that I could suggest prices and sale would depend upon your agreement ...

[190] The letter from Elwyn Lynn to Cynthia Nolan dated 6 August 1976 states:
No response from Canberra. As I shall be away 3 months, viewing the works in the Power Storage would be difficult but Kelly could arrange it ... However, he is not competent to negotiate. Rudy could contact Kelly and Kelly could contact Canberra for viewing without Rudy's being aware of where the pictures are. But, I really think it better for the pictures to be at Rudy's for the 3 months I am away. In that way he can make further approaches to Canberra and not involve anyone as to the whereabouts of the works. Maybe I won't give him the lot, but we have told Canberra the titles and number, of course.

[191] A letter from Elwyn Lynn (from England) to Lily and Victoria Lynn dated 6 November 1976 relevantly states:
Sid Nolan phoned me at 5.30 am this morning. He and Jinx are living at the Dorchester; he won't go back to the house and Jinx collects the mail. The place is stripped and as probate interferes he can do nothing about the place in London ... the inquest is over and Lord Clarke made some kindly remarks about Cynthia in the press, Cynthia left a couple of unbitter and generous notes, declaring she was doing the best thing ... Jinx had to tell him [Sidney Nolan] about the crate of ptgs arriving in London but nothing else as yet, because it may be in her will. Sid said that she tried to make her wills very clear, but he's afraid that it is a bit of a mess.

[192] I conclude from the above letters that on the balance of probabilities "Hare in Trap" 1946 was in Australia as at June 1976 and as late as August 1976. The letters cast no further light on the whereabouts of "Italian Crucifix" 1955, or any other paintings originally stored at the Power Gallery, save for those nominated for sale. I am unable to determine from the letters whether "Italian Crucifix" 1955 was in Australia as at June 1976. [193] I conclude that the attempted sale by Cynthia of paintings including "Hare in Trap" 1946 was conducted without the knowledge of Sidney Nolan. The use of a separate business address and the repeated stipulations of confidentiality support that conclusion. [194] In giving evidence at trial on the Power Gallery deposit of paintings by Cynthia Nolan, Mr Tim Kelly, an officer at the Power Gallery at the time, stated that he believed that the "loan" of the works was "a private arrangement between Cynthia Nolan and Jack Lynn, and the Power Gallery was just holding the paintings". Mr Kelly was aware, at the time, of the offer to sell paintings in June 1976 to the National Gallery on behalf of Cynthia. He stated that he knew that the matter was confidential because he knew that the paintings were not part of the Power Gallery collection. Mr Kelly supervised the despatch of the paintings to the David Jones Art Gallery in 1975. At the end of that exhibition, when they were returned to the Power Gallery, he put them back in storage where they remained until they left the Power Gallery collection, but he could not recall a specific date. [195] Although it is not possible to discern the full meaning of the correspondence and documents relating to Cynthia's deposit of paintings at the Power Gallery, it appears (and is conceded by the plaintiff) that Sidney Nolan did not know of, or consent to, the arrangements made by Cynthia in relation to the 26 paintings during 1974-76. Lily Lynn, the wife of Elwyn Lynn and an executor of Cynthia's Australian will, may have given evidence on those matters. There is evidence that 10 VR 626 at 657 Mrs Lynn visited Melbourne in October 2002. The plaintiff's failure to call her is unexplained. I infer, pursuant to Jones v Dunkel,32 that Mrs Lynn could have given no evidence which would assist the plaintiff's case. On the balance of probabilities, I find that the purported loan by Cynthia to the Power Gallery was not a regular loan to the Power Gallery, University of Sydney. Further, I find that Sidney Nolan did not authorise or endorse any related assertions of ownership or other conduct by Cynthia. I further find that

Page 33 Cynthia took deliberate steps to conceal her activities from Sidney Nolan. The defendants submit that such conduct requires or justifies the rejection of associated documents. The plaintiff submits that Cynthia's conduct is consistent with an owner of property seeking to protect it from the demands of a spouse and to avoid marital disharmony. I consider that the documents relating to the relevant activities must be viewed with great caution, rather than rejected outright. Cynthia's deliberate concealment of her dealings or claims in relation to those paintings from Sidney Nolan is also, in my opinion, an additional justification for caution in assessing claims by Cynthia in documents relating to other paintings. Status of exhibition catalogues [196] The plaintiff submitted that exhibition catalogues, particularly when prepared by reputable galleries, are likely to be accurate records of title in determining the ownership of disputed paintings. In that context, the plaintiff relied on the decision of the United States Court of Appeals for the Second Circuit, in Kunstsammlungen zu Weimar v Elicofon,33 in which the court referred to the attribution in a catalogue in the course of determining a dispute over the ownership of paintings. [197] In that case, it was necessary to determine which of a number of competing claimants was entitled to recover certain paintings stolen in Germany after the Second World War. Both at first instance and on appeal, it was held that early in the twentieth century, title to the paintings in question had passed from the ruling house of Thuringia to the State of Thuringia, pursuant to certain agreements. The Court of Appeal referred, in the course of its judgment, to the absence in an early twentieth century museum catalogue of any acknowledgment that the paintings were owned by the Grand Duke. It is clear that the curial determination of title did not depend on the catalogue, but on the construction of relevant agreements. The court's reference to the catalogue appeared to fortify a conclusion it had reached on the basis of the construction of those agreements. [198] There is no indication in the judgment of the status of the museum catalogue, of the circumstances of its preparation or its probable accuracy. The catalogue was nevertheless accorded some weight in relation to the determination of ownership, but in a merely supplementary or confirmatory role. [199] For the defendants, it was submitted that exhibition catalogues do not have the status of a register of titles and that those preparing such catalogues are totally dependent, in relation to attribution of ownership, on the accuracy of the information supplied to them. 10 VR 626 at 658 [200] Following the defendants' objections to the admissibility of his evidence, I permitted Mr Daniel Thomas to give "expert" evidence in relation to the status of catalogues, as a "convenient helper of the court".34 [201] Mr Thomas held the position of Senior Curator of Australian Art at the National Gallery of Australia and was the Director of the Art Gallery of South Australia. He has an MA in modern history from Oxford University and decades of professional experience as a curator. [202] Mr Thomas' evidence was to the effect that:

5a) 5b)

4c) 1d)

It is common practice for art galleries, public galleries, reputable commercial galleries and auction houses to take great care in relation to all matters that assist in identifying a work of art, including ownership provenance. Mr Thomas considered that the Whitechapel Art Gallery, London, the Arts Centre, New Metropole, Folkestone, Kent, the Power Gallery of Contemporary Art, University of Sydney, the David Jones Art Gallery, Sydney, and the Moderna Museet, Stockholm, were reputable galleries at the dates relevant to the present proceeding. Provenance investigation of art works in Australian museums and galleries was routine by 1958 and is now standard art museum practice. Galleries vary in their standards, and within an institution, the standards depend on the particular person who is preparing the catalogue.

Page 34

1e)

1f) 1g) 1h) 1i) 1j) 1k) 1l) 1m)

1n)

1o)

Although Mr Thomas considered himself to have high standards, a catalogue that he had prepared for the Nolan retrospective exhibition in 1967 for the Art Gallery of New South Wales which he intended to contain a complete reproduction history, did not do so. He conceded that sometimes, errors are made in catalogues, and they are not complete or accurate. Sometimes catalogues deliberately withhold the identity of the owner of paintings. It is not uncommon for the catalogue to provide that unless otherwise stated, a work comes from a private collection. Catalogues are variable in the degree and extent of information they provide. Catalogues are prepared in a variety of ways for a range of reasons -- for example, they may contain a reproduction history of relevant works, but not an exhibition history. "The compiler of the catalogue is only as good as the source of the information to the compiler." A "credit line" is the means of "crediting" ownership in some published documents (including catalogues). The credit line which ultimately appears in the catalogue might not accord with the credit line the lender has requested. The lender of a painting may differ from the owner. If a painting is loaned by someone other than the owner, Mr Thomas would expect that the owner might be consulted as to credit lines. It was possible that a painting might be attributed in a catalogue to the collection of someone who was in long-term possession, as distinct from the absolute owner, but if the compiler were aware of an absolute or "true owner", he or she would try to include both the owner and the custodian in the acknowledgment. 1 10 VR 626 at 659 Private owners may not wish to be identified for fear of burglary, so that anonymous loans or attributions to "private collection" are fairly common. Mr Thomas said that "sometimes credit lines are sort of fantasy like 'lent by the Melbourne/Sydney collection' or 'lent by some [place/name] collection' which has no real relevance, at all. It might be the owner's birthplace or it might be the birthplace of their favourite aunt or grandmother. Quite strange things get into credit lines which are always the owner's preference." Sometimes mistakes are made in credit lines.

[203] In the light of Mr Thomas' evidence, I conclude that although persons compiling or preparing exhibition catalogues at reputable galleries would generally endeavour to attribute ownership or other entitlements accurately, and would probably take some steps to investigate a problem or uncertainty of which they became aware, they lack the incentive, means and skills to investigate title claims forensically and routinely to identify or resolve problems in relation to title. In some cases, credit lines are not only inaccurate, but deliberately uninformative or fictional, when that is requested by the person identified as the owner. [204] I consider that the compilers of such catalogues are dependent on the accuracy of the information provided by the purported owner, who is frequently obliging a gallery by agreeing to lend a painting. I consider it likely that in the absence of cause for suspicion, compilers would make an attribution of ownership according to the instructions of a lender who asserted ownership, or in reliance on that person's appointed or apparent agent. [205] In the context of the present case, I consider it likely that in the case of the Nolans, where (as the plaintiff asserts) Cynthia, as Sidney Nolan's spouse, also acted as an assistant closely involved in Sidney Nolan's work, galleries would act upon Cynthia's information and instructions as to attribution in catalogues, unless aware that Sidney Nolan disputed them. When Cynthia dealt with galleries in relation to such matters, it is unlikely that gallery officers would seek Sidney Nolan's independent verification of her representations. I consider that the documentary evidence of Cynthia's dealings with Moderna Museet, on

Page 35 which the plaintiff relies, (discussed in detail below) is consistent with that conclusion. [206] I therefore conclude that although an attribution of ownership in a reputable catalogue provides some evidence of ownership, exhibition catalogues are in no sense equivalent to a register of title and must be approached with considerable caution, independently of the caution which is generally required in assessing claims against a deceased estate. Letters from Cynthia to Jinx Nolan 1976 [207] Certain additional correspondence of Cynthia is tendered by consent. [208] The letter from Cynthia Nolan to Jinx Nolan dated May 1976 stated that Cynthia had been:
... for some time considering the advisability of getting a few really good large (3 2 ft, probably not so large!) paintings to you in America. for eg: Bird in landscape that perhaps you remember in the hall at 79 Deodar. Hare in trap came to mind ... Anyway good to have the possibility of some cash some time and paintings sold in USA ...

[209] On the basis of the letter, Ms Jinx Nolan formed the belief that "Hare in Trap" 1946 belonged to Cynthia. The letter does not contain, in terms, an assertion of ownership of "Hare in Trap" 1946 by Cynthia. It is equally consistent with 10 VR 626 at 660 ownership by either Sidney or Cynthia, or by them jointly, or with a promise by Sidney Nolan to make a gift in future. It is not clear whether Sidney Nolan knew of, and consented to, the tentative proposal. "Hare in Trap" 1946 was not forwarded to Ms Jinx Nolan. In my opinion, the letter throws no light on the ownership of "Hare in Trap" 1946. [210] The letter from Cynthia to Jinx Nolan dated September 1976 states:
Have arranged to air 5 pics to Bloomer marked for Ms Jinx Nolan ... They are your possessions so should not have trouble getting in ... S does not and should not know anything about them. He would simply borrow them for an exhibition and they'd not be seen again. Remember they were given to me so would only be charged on if around when/if I went up above -- others will be -- and many were taken back and sold by S and I did work for him extensively for many years without any secretary etc salary (never thought of it) and kept him going often (all this for your conscience, not mine).

[211] The letter of September 1976 does not identify the paintings which Cynthia had arranged to send to Ms Jinx Nolan. The letter casts no light on the ownership of any of the paintings the subject of the present proceeding. Ms Nolan gave evidence that she received the five paintings, which included four paintings by Sidney Nolan different from those the subject of this proceeding. [212] The letter does, however, constitute an assertion of ownership by Cynthia to the unidentified paintings. Further, Cynthia asserts that Sidney Nolan had "given" her paintings in the past but "many were taken back and sold by S[idney]". The letter discloses that Cynthia required her actions to be concealed from Sidney Nolan ("S does not and should not know anything about them") in order to prevent such a retraction ("He would simply borrow them for an exhibition and they'd not be seen again"). [213] The plaintiff submits that this letter is not inconsistent with Cynthia's ownership of the paintings. It is contended that although a party to a marriage may own property and have a clear legal entitlement to deal with it, such dealing may give rise to disharmony in the relationship. In such circumstances, it is said that secret dealings may be consistent with Cynthia's "attempting to protect her ownership of the works from her husband". [214] The defendants, on the contrary, submit that the letter constitutes an implicit acknowledgment by Cynthia of Sidney Nolan's right to "take back" paintings. [215] In my opinion, the letter is consistent with a number of different possibilities. It is consistent with

Page 36 Sidney Nolan having, on occasion, expressed words of gift in relation to certain paintings, or otherwise manifested a donative intention to Cynthia, but retaining control of, and continuing to assert rights over, the paintings, disposing of them as absolute owner contrary to Cynthia's wishes. [216] There are several other possibilities. Sidney Nolan may have promised to make a gift in future, or gifted a limited interest with a reserve of rights to himself, such as to exclude an intention to transfer absolute ownership to Cynthia. Sidney Nolan may have expressed equivocal words, which Cynthia interpreted as words of gift but which Sidney Nolan interpreted differently. Additionally, or alternatively, he may have spoken words of gift but made no delivery of possession to Cynthia. Clear and absolute words of gift are ineffective to constitute a complete gift if delivery is wanting. The donor may retract the purported gift at any time prior to delivery. A further possibility is that Sidney Nolan reclaimed valid gifts which he had made to Cynthia. 10 VR 626 at 661 [217] It is unnecessary for me to make a finding on whether Sidney Nolan, on occasion, promised to make gifts but failed to fulfil his promise; or expressed words of gift but failed to complete the gift by delivering possession to Cynthia; or made valid gifts and Cynthia subsequently acquiesced in their retraction. It is sufficient, in the present context, to observe that Cynthia's readiness to deal with paintings behind Sidney Nolan's back, her consciousness of the insecure status of some "gifts" which, in her view, Sidney Nolan failed to recognise or honour and her willingness to address that problem by a measure of secretive selfhelp, constitute added reasons for strict scrutiny and a cautious approach. J. Legislation and principles relevant to admissibility [218] In the present case, with few exceptions, the defendants objected to the admissibility of the principal documents on which the plaintiff sought to rely to establish the alleged gift of the three paintings to Cynthia. [219] In Aktiebolaget Hassle v Alphapharm Pty Ltd35 Gleeson CJ, Gaudron, Gummow and Hayne JJ, in their joint judgment, observed that in order to provide procedural fairness, "[p]arties should know, before addresses are taken, the final state of the evidence". [220] Their Honours considered that a trial judge's failure to make express rulings at trial in that case was "unfortunate".36 [221] In the present case, Mr Dreyfus QC, senior counsel for the defendants, in objecting to the admissibility of the documents, expressly stated that he did not seek rulings on those objections at trial. Rather, he made submissions on the statements in the documents, on the alternative bases that the documents "did not go in, or that some or all of them went in". The plaintiff also consented to the course of ruling in the judgment upon the admissibility of the documents given the unusual nature of the case, where there were very few witnesses to give factual evidence and reliance on a large number of significant documents. [222] The material relied on by the plaintiff to establish Cynthia's ownership of the paintings, upon which her own claim depends, consists of documents which fall into a number of broad categories, including, principally, alleged licences or loan agreements executed by Cynthia, letters, and gallery exhibition catalogues said to ascribe the paintings in question to Cynthia's collection, possession or ownership. If the documents or the statements in them are admitted, it will be necessary to determine the weight properly attributable to those documents or statements. [223] In order to avoid repetition, I consider the relevant legislation and doctrines generally applicable to the admissibility of the documents below. Evidence Act 1958 [224] Section 55(1) of the Evidence Act 1958 ("the Act") provides:

Page 37
In any legal proceeding (not being a criminal proceeding) where direct oral evidence of a fact would be admissible, any statement contained in a document and tending to establish that fact shall be admissible as evidence of that fact if --

2a) 2b)

the maker of the statement had at the time of making the statement personal knowledge of the matters dealt with by the statement, and is called as a witness in the proceeding; or

10 VR 626 at 662

the document is, or forms part of, a record relating to any business and made in the course of that business from information supplied (whether directly or indirectly) by persons who had, or may reasonably be supposed to have had, personal knowledge of the matters dealt with in the information they supplied and the person who supplied the information recorded in the statement in question is called as a witness in the proceeding.

"Document" is broadly defined in s 3 of the Act as follows:

"document" includes, in addition to a document in writing --

3a) 3b) 1c) 1d) 1e) 1f)

any book map plan graph or drawing; any photograph; any label marking or other writing which identifies or describes any thing of which it forms part, or to which it is attached by any means whatsoever; any disc tape sound track or other device in which sounds or other data (not being visual images) are embodied so as to be capable (with or without the aid of some other equipment) of being reproduced therefrom; any film negative tape or other device in which one or more visual images are embodied so as to be capable (as aforesaid) of being reproduced therefrom; and anything whatsoever on which is marked any words figures letters or symbols which are capable of carrying a definite meaning to persons conversant with them;

"Statement" is defined in s 3 of the Act as follows:

"statement" includes any representation of fact whether made in words or otherwise.

"Legal proceeding" is defined in s 3 of the Act as follows:

"legal proceeding" includes any civil criminal or mixed proceeding and any inquiry in which evidence is or may be given before any court or person acting judicially;

"Business" is defined in s 3 of the Act as follows:

"business" includes public administration and any business profession occupation calling trade or undertaking whether engaged in or carried on by the Crown, or by a statutory authority, or by any other person, whether or not it is engaged in or carried on for profit;

[225] Section 55(1) of the Act permits, in terms, the admission of statements in documents, rather than documents as such. Needham J in Re Marra Developments Ltd and the Companies Act,37 in relation to an equivalent provision in New South Wales legislation, observed that in his view such provisions "make admissible statements in documents, and not documents themselves. Accordingly, the presence of an admissible statement in a document does not make the balance of the document admissible, if it is otherwise inadmissible." [226] It is, then, necessary to identify a statement, which is broadly defined to include "any representation of fact whether made in words or otherwise". The plaintiff contends that in some instances in the present case, the entire document is identifiable with the statement. In several Victorian decisions on s 55(1) or the prior equivalent provisions, there has been no reference to the distinction between documents and the statements contained in them. The court in cases such as Morley v National Insurance Co38 and Hurley v

Page 38 Southwick39 has proceeded on the basis that the documents were admissible. 10 VR 626 at 663 [227] In Cullis v Hammersley Iron Pty Ltd40 Neville J noted, in relation to Western Australian equivalent legislation, that "statement" should not be given a restricted meaning and would apply to any material which would come within the very wide meaning of the word "statement" or "document".41 That observation would appear equally applicable to s 55(1) of the Act. [228] As such, in many instances it may not be necessary to distinguish between a statement or a document in the context of s 55(1). The necessity to distinguish would clearly arise where, for example, a document contains statements made by more than one person, only one of whom had personal knowledge of the matters dealt with, or where it contains a combination of relevant and irrelevant material. 42 [229] Section 55(1) of the Act constitutes an exception to the rule against hearsay. The policy and rationale for s 55 and like statutory provisions was explained by Hope J in Albrighton v Royal Prince Alfred Hospital43 as follows:
Any significant organization in our society must depend for its efficient carrying on upon proper records made by persons who had no interest other than to record as accurately as possible matters relating to the business with which they are concerned. In the everyday carrying on of the activities of the business, people would look to, and depend upon, those records, and use them on the basis that they are most probably accurate ... The purpose of Pt IIC is to bring into the court room a method of establishing the truth which is relied upon by our society outside the court room to bring into the rules of evidence a reality which they otherwise lacked ... Properly understood and applied, Pt IIC makes available to courts, in a way to be found in many other parts of the common law world, a most valuable source of evidentiary material which rules of evidence devised in another age would exclude.

[230] As Warren J observed in Hurley v Southwick,44Albrighton v Royal Prince Alfred Hospital concerned New South Wales provisions which "impose a different and indeed more liberal regime than that provided in s 55 of the Victorian Act". There is, however, longstanding judicial consensus that s 55 (and previous statutory equivalents) "is intended to be construed liberally and without undue restriction" 45 and "[t]he Act is one designed to liberalize the rules of evidence and should not be restrictively construed".46 [231] Section 55 of the present Act was formerly embodied in s 3 of the Evidence Act 1946 (No 5183), which imposed several additional hurdles or preconditions to admissibility. Section 3 of the Evidence Act 1946 required production of the original documents and a continuous record. It also required the maker of the statement to make it in performance of a duty to record information supplied. Those requirements were removed following the Report of the Chief Justice's Law Reform Committee dated 31 March 1971. [232] Section 55(1) of the Act provides two alternative bases for admission of statements in documents. 10 VR 626 at 664 [233] Where direct oral evidence of a fact would be admissible, any statement tending to establish the fact will be admissible under s 55(1) if either:

6a) 6b)

the maker of the statement had, at the time of making the statement, personal knowledge of the matters dealt with in the statement, or the document is or forms part of a record relating to any business made in the course of the business from information supplied directly or indirectly by persons who had, or may reasonably be supposed to have had, personal knowledge of the matters dealt with in the information they supplied.

[234] Although by s 55(1) the maker of the statement or the person supplying the information must be called a witness in the proceeding, that condition need not be satisfied in a number of circumstances set out in s 55(5), which relevantly include that the person is dead or unfit to attend (s 55(5)(a)) or is out of Victoria and his attendance cannot be reasonably practicably secured (s 55(5)(b)) or he cannot with

Page 39 reasonable diligence be found or identified (s 55(5)(c)). [235] In ascertaining whether or not a statement is admissible under s 55(1), including, determining whether the maker or supplier had personal knowledge of the matters dealt with by s 55C, "the court may draw any reasonable inference from the form or contents of the document in which the statement is contained, or from any other circumstances". [236] In Hurley v Southwick Warren J, relying on the terminology "may reasonably be supposed to have had personal knowledge" and on s 55C, inferred from the contents of hospital medical reports and evidence given by a patient's wife (who had supplied information), that the wife had had personal knowledge of matters dealt with in the reports, although she could no longer remember what she had said to the compilers of the medical reports. [237] There are two provisions which place limits on admissibility under s 55(1) of the Act. The defendants seek to rely on those provisions to exclude documents which the plaintiff tenders to establish a valid gift to Cynthia. [238] First, s 55(4) provides:
Nothing in this section shall render admissible as evidence in any legal proceeding any statement made by a person interested at a time when the proceedings were pending or anticipated involving a dispute as to any fact which the statement might tend to establish.

[239] The previous equivalent subsection was in somewhat different terms. Section 3(3) of the Evidence Act 1946 provided:
Nothing in this section shall render admissible as evidence any statement made by a person interested at a time when proceedings were pending or anticipated involving a dispute as to any fact which the statement might tend to establish.

[240] In Shepherd v Shepherd47 Sholl J held that s 3(3) of the Evidence Act 1946 applied in relation not only to the proceedings in which the statement was ultimately tendered, but to:
... any proceedings at all in which the statement might become admissible by way of cross-examination or reexamination ... It is obvious, in my judgment, that the "proceedings" need not be the proceedings in which the statement is ultimately tendered and in which it becomes necessary to rule on admissibility. Earlier and different pending 10 VR 626 at 665 or anticipated proceedings, including a criminal prosecution, may, on the view I have expressed, be sufficient to answer the description in the sub-section.

[241] That statement was approved in relation to s 14B(3) of the Evidence Act 1898 (NSW) (a provision in very similar terms to s 3(3) of the 1946 Victorian Act) in Accident Insurance Mutual Holdings v McFadden48 where Clarke JA observed:
The question would not seem to be, therefore, limited to whether the person had an interest in the actual litigation in which it was sought to tender his statement.

[242] There are two distinct judicial approaches to construction of "a person interested". The first approach requires a "complete absence of bias". The second approach does not require complete impartiality but excludes evidence if there is a real likelihood of bias and a substantial material interest. 49 [243] Sholl J, in two well-known Victorian decisions, adopted a broad construction of "a person interested"

Page 40 which exemplifies the "complete absence of bias" approach. [244] In Tobias v Allen (No 2)50 Sholl J observed that:
... it is in my opinion sufficient to constitute a disqualifying interest within the meaning of the subsection if a person's conduct is likely to be called into question in the pending or anticipated litigation, or his reputation, or if a person's financial interest is likely to be affected -- if, in short, anything is shown which is reasonably calculated to affect the impartiality of the person making the statement.

[245] In Shepherd v Shepherd51 Sholl J considered relevant authority and concluded that:
I am content to assume, for the purpose of the present case, that an "interest" is something which need not be a financial interest. It need not even be an interest which consists in a desire to preserve oneself from criticism of one's conduct.

[246] The question arises whether Sholl J's construction of the previous embodiment of s 55(4) has valid application to its current terminology. Harper J in Abigroup Contractors Pty Ltd v BPR Pty Ltd52 drew attention to differences in the 1946 Act. He also noted the inclusion in the 1946 Act of s 4, which contemplated the admission of statements of persons who were not impartial (albeit not for a reason based upon such considerations as material advantage). [247] His Honour noted that Sholl J in Shepherd v Shepherd and Tobias v Allen (No 2) had not taken account of s 4, and that fact, coupled with the differences in the legislation, caused Harper J not to follow Sholl J's reasoning. [248] Harper J held53 that s 55(4) did not apply to exclude the evidence of a witness who, although contentious:
... stands to gain no material advantage according as to whether the plaintiff is successful or not in this case. Nor is there any suggestion that [the witness] will benefit or be disadvantaged in a non-material way, depending upon the outcome of the litigation, save that his reputation may be affected. Such a possibility ... is in my opinion not sufficient to amount to an interest for the purposes of sub-section 4. I rely in this 10 VR 626 at 666 connection on statements in Cross on Evidence to the effect that there must be a real likelihood of bias before the maker of a statement can be said to be a person interested.

His Honour's statement reflects the "substantial material interest" approach to the construction of s 55(4). [249] In my opinion, Harper J's caveat about the status of Sholl J's reasoning in Shepherd v Shepherd, Tobias v Allen and the status of decisions on provisions more equivalent to s 3(3) of the Evidence Act 1946 should be heeded. Harper J's observations, rather than those expressed by Sholl J, constitute preferable guidance to the construction of "a person interested" in s 55(4). [250] It has been doubted "whether the difference in the tests [of a 'person interested'] in truth will often have practical consequences".54 [251] Clarke JA took that view in Brown v Petranker55 where he observed:
The test which should be applied in determining whether a person is "interested" is that expressed by this court in Wentworth v Rogers (No 10) (1987) 8 NSWLR 398 at 404, where Glass JA (delivering the judgment of the Court) said: "... It does not mean interested in the wide sense but having such an interest as could lead to the belief that the maker of the statement had an interest to distort the truth." The test there expressed is not substantially different from that put forward by Sholl J in Tobias v Allen (No 2) [1957] VR 221 at 223: "... if, in short, anything is shown which is reasonably calculated to affect the impartiality of the person making the statement."

Page 41

[252] In Brown v Petranker,56 Clarke JA (with whom Handley and Waddell JJA agreed) considered that a person facing impending death may be regarded as "a person interested" in circumstances where she had a family relationship with people who "would be likely to benefit significantly" from the transaction to which the statement related. His Honour rejected authority to the contrary, observing that "The fact that a person is a near relative of a party may be sufficient in itself to indicate such an interest". [253] In the present case, I consider that Cynthia may be regarded as a "person interested" in relation to a dispute with Sidney Nolan over title to paintings in that she would either be likely to enjoy the fruits of success personally or Jinx Nolan, her daughter, would be likely to benefit significantly in the event of Cynthia's death. [254] Section 55(4) was inserted by the Evidence (Documents) Act 1971. In contrast to the previous equivalent provision, s 55(4) refers to "a time when the proceedings were pending or anticipated" (emphasis added). There is no direct authority on whether, under s 55(4), in contrast to the previous position, the very proceeding in which it is sought to tender the evidence must be pending or anticipated. The altered phraseology, with the addition of the definite article ("the proceeding"), may indicate that the proceeding in which it is sought to tender the evidence must be pending or anticipated in order to exclude evidence under s 55(4). That construction would uphold a policy of expanding the category of admissible documents, in that exclusion would be mandatory only in more limited circumstances, while s 55(9) would provide a flexible discretionary basis for exclusion. 10 VR 626 at 667 [255] A limitation to the very proceeding in which it was sought to tender the document or statement would constitute a substantive change from the previous equivalent provision, as construed in relevant authority. It would restrict the operation of the subsection. Such a change would be consistent with the general policy of expanding the admissibility of evidence, which underpins Pt 3 Div 3 of the Act. Although there is nothing to suggest that the altered terminology was intended to introduce any substantive change, 57 in my opinion, effect should be given to the inclusion of the definite article. Section 55(4) should apply only when the proceeding in which it is sought to tender the document was pending or anticipated. [256] Clearly, at the time of Cynthia making the relevant statements contained in the documents, the present proceeding was not pending or anticipated. [257] Ultimately, it is unnecessary for me to determine whether the operation of s 55(4) is limited to the proceeding in which it is sought to tender the evidence, as I do not consider that either this proceeding or any other proceeding was "pending or anticipated" in the relevant sense at the time of Cynthia making the statements. [258] The meaning of "anticipation" in this context was considered by the Court of Appeal in Jarman v Lambert & Cooke Contractors Ltd.58 Lord Denning there stated:59
Anticipation is a state of mind whereby someone considers that something is likely to happen. There must be a likelihood of them. Someone must consider it likely that proceedings will take place; and that someone must ordinarily be the person who makes the statement; for it is his state of mind which is material. His statement is to be excluded, if he is a person interested and makes it with a view to proceedings. If the state of mind is such that he says to himself "it looks to me as if this will end up in court; I must be careful what I say", then proceedings are anticipated and the statement is inadmissible. But if his state of mind is such that he only says to himself "I do not know whether this will end up in court or not; it may or may not do so, but I am not going to anticipate that it will; I will give my version of for what it is worth", then proceedings are not anticipated, and the statement is admissible.

[259] Evershed MR stated:60

I am prepared for my part to accept the view ... that by "proceedings were anticipated" is meant "proceedings were regarded as likely", or even, if you will, "reasonably probable".

Page 42

[260] The test in Jarman v Lambert & Cooke Contractors Ltd was recently endorsed by Beazley J in Feltafield Ltd v Heidelberg Graphic Equipment (formerly aka Aldus Ltd).61 [261] In Mitsubishi Electric Australia Pty Ltd v Victorian WorkCover Authority,62 Batt JA considered the decision in Jarman v Lambert & Cooke Contractors Ltd was of assistance in relation to the construction of the words "pending or anticipated" in the related context of legal professional privilege. His Honour considered that although there must be a likelihood of proceedings, "the word 10 VR 626 at 668 'likely' imports only that the occurrence under consideration is a chance or possibility, not that it is more likely than not".63 [262] He disagreed with Goldberg J's evaluation of the notion in Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd64 as being "more probabl[e] than not they [proceedings] will be commenced". [263] Batt JA concluded, "In summary, then, as a general rule at least, there must be a real prospect of litigation, as distinct from a mere possibility, but it does not have to be more likely than not". 65 [264] His Honour also observed, "[U]nder s 55(4) of the Evidence Act 1958 and cognate legislation it may be that whether proceedings were anticipated is to be determined by reference to the state of mind of the maker of the statement or, perhaps, the supplier of the information".66 [265] Callaway JA agreed with Batt JA but "did not find cases on s 55(4) of the Evidence Act 1958 and cognate legislation of assistance".67 [266] In the present case, the evidence indicates that from late 1974 and up to and during 1976, Cynthia may have anticipated a dispute or disagreement with Sidney Nolan in relation to title to or dealings with paintings. [267] I do not consider that the evidence justifies a conclusion that Cynthia, at the time of making the statements, considered there was a real prospect, as distinct from a mere possibility, that legal proceedings would be commenced and that she made those statements with a view to such proceedings. While a cautious approach to assertions by Cynthia is required, the exclusion of her statements pursuant to s 55(4) is not justified. [268] In summary, if it be correct that the very proceeding in which it is sought to tender a statement must be pending or anticipated in order to exclude evidence under s 55(4), that provision would not, in my opinion, apply to exclude Cynthia's statements. While Cynthia may be said to be a "person interested" in the sense that there was a real likelihood of her bias in any dispute as to her title to the paintings, I do not consider that the present proceeding (or any other proceeding) was either pending or anticipated. [269] Therefore, Cynthia's interested status would not operate to exclude her statements from admission, although it is relevant to the weight that should be accorded to them. [270] The other provision potentially limiting the admissibility of statements under s 55(1) is s 55(9), which provides:
The court may in its discretion reject any statement or defer the admission of and subsequently reject any statement notwithstanding that the requirements of this section are satisfied with respect thereto, if for any reason it appears to it to be inexpedient in the interests of justice that the statement should be then admitted or, as the case requires, should be admitted at all.

10 VR 626 at 669 [271] In Hurley v Southwick Warren J declined to exercise her discretion under s 55(9), although the documents related to a central question in the proceeding, because the medical authors of the statements were called and the evidence could be tested in cross-examination.
68

Page 43 [272] In Compafina Bank v Australia & New Zealand Banking Group Ltd69 Hunt J permitted the reception of a copy letter by one non-party to another non-party as a business record under New South Wales legislation. His Honour declined to exercise a discretion to exclude the letter because the writer may well have had an interest to misrepresent the facts stated. He observed:70
It may be that, in other circumstances, statements made in letters sent by the company of which copies are kept as company business records would be rejected as being improbably accurate or suspiciously untrustworthy, so that their weight is too slight to justify their admission: s 14CP. The discretion to reject documents which would otherwise qualify for admission pursuant to s 14CE is an important one by which a great deal of flexibility is allowed to the courts to ensure that the rules of evidence permit access to "a most valuable source of evidentiary material" (Albrighton's case,; [1980] 2 NSWLR 542,at p 549), but exclude such material where it is unlikely to establish "the truth which is relied upon by our society outside the court room".

[273] Hunt J declined to reject the relevant letter, because he accepted that the statements it contained were "just as likely to be accurate as any other company record".71 Further, while he acknowledged that the absence of an opportunity to test the statements which the letter contained "was certainly a relevant consideration in the exercise of the discretion" there was no real conflict between the parties on the matter".72 [274] In the present case, Mr Dreyfus QC, for the defendants, submitted that a number of matters, including some inconsistencies in Ms Jinx Nolan's evidence, the search of the Cynthia Nolan Papers, Mr Smith's role in the proceeding, his partner's financial dealings with Ms Nolan and some irregularities in the plaintiff's solicitor's conduct of the matter at trial, justified an exercise of the discretion to exclude documents pursuant to s 55(9). [275] I am not persuaded that any person intended to mislead the court or that any non-compliance was deliberate. Further, only the search of the Cynthia Nolan Papers is directly relevant to a determination of the principal issues in dispute. [276] While the absence of an opportunity to cross-examine is relevant to the discretion to exclude evidence under s 55(9) of the Act, great flexibility is permitted. In the present case, both parties to the alleged gift transactions are dead. The plaintiff is almost entirely dependent on documentary material. In the circumstances, I do not consider that the interests of justice would be served by excluding such evidence. I consider it appropriate to admit evidence where possible, while exercising due scrutiny and caution in relation to weight. 10 VR 626 at 670 Ancient documents [277] The plaintiff also seeks to rely on the rule relating to "ancient documents" which applies to documents more than 20 years old. The rule relating to the admission of ancient documents was stated by Willes J in Malcomson v O'Dea:73
Ancient documents coming out of proper custody, and purporting upon the face of them to show exercise of ownership, such as a lease or a licence, may be given in evidence without proof of possession or payment of rent under them, as being in themselves acts of ownership and proof of possession.

[278] The learned authors of Cross on Evidence74 observe that ancient documents function as circumstantial evidence. Their contents are not tendered as proof of anything they assert but "offered to the court as the final document which would only have been executed by someone in possession". [279] Willes J (delivering the unanimous opinion of the judges) noted that the rule was sometimes qualified to require some proof that possession followed similar documents or some proof of actual enjoyment in accordance with the title to which the documents relate.75 He questioned whether the absence of proof of enjoyment consistent with such documents "goes to the admissibility or only to the weight of the evidence,

Page 44 probably to the latter".76 In the case before him, it was not material, because repeated payments and receipts of rent under the leases were proved.77 [280] The document admitted under the ancient documents rule in Malcomson v O'Dea was an assembly book held by a local corporation, through which the plaintiff claimed to be entitled to the lease of a fishing right allegedly granted by the Crown to the corporation centuries before. The relevant entries in the assembly book were made in 1676. [281] Willes J, in admitting one entry in the assembly book, emphasised that it was admissible not as a mere statement that a person had become a tenant to the corporation or a mere direction to prepare a lease to him, but because it purported to be "his warrant and license [sic] for fishing in the river". Willes J noted:78
In the former case it would be a mere written assertion by the Corporation and its officers. In the latter case it was an act of ownership; for it was a license [sic] for another to use the fishery ... Whether strong or weak, it was an act of ownership ...

[282] In Blandy-Jenkins v Earl of Dunraven79 Lindley MR held admissible an ancient document which, in essence, compromised an action for trespass brought by the plaintiff's predecessor in title because, although not itself an act of ownership, it purported "upon the face of it to shew exercise of ownership".80 While not an act of ownership, it showed that there was an act of ownership. Romer LJ agreed with that reasoning, although both Romer LJ and Sir F H Jeune also adverted to the circumstance that the document contained a statement by a deceased person ("who had a peculiar means of knowing the matter stated") 10 VR 626 at 671 contrary to his pecuniary interest.81Blandy-Jenkins may be an example of the court receiving hearsay without expressly acknowledging it.82 [283] "Proper custody" in Blandy-Jenkins was defined as "the place where one would expect such a document as this to be kept -- that is to say, it is kept by those who are interested in the land the possession of which was vindicated ...".83 [284] The statement of the doctrine in Blandy-Jenkins required the document to show on its face an exercise of ownership, rather than a mere assertion of ownership or a step towards an assertion.84 [285] Bristow and Livingstone v Cormican and Nelson85 involved a claim of trespass in relation to fishery rights. It was founded on a Crown grant and certain leases made since 1660. [286] Lord Cairns admitted a lease as an ancient document, noting86 that:
Old leases have always been considered to be admissible as being evidence of acts of ownership. I understand this to rest on the principle, that when at a distant period, as to which there is no more direct evidence available, you find a person claiming to be the owner of property, and willing to make himself responsible as lessor for the title to it, and another person willing to agree to give rent for the property and to enter into a solemn engagement as a tenant of it, admitting to his landlord's title, these circumstances are of themselves admissible as evidence of the title.

[287] However, weight was a different question. Similarly, Lord Blackburn stressed that while old leases were traditionally admissible, as were licences, "the weight of such evidence depended on extraneous circumstances".87 [288] The plaintiff submits that loan agreements and exhibition catalogues which ascribe paintings to the collections of nominated persons or otherwise attribute ownership, if over 20 years old, are admissible as ancient documents. [289] In the present case, the exhibition catalogues which make such attributions are not documents executed by identified parties. They do not "show on their face an exercise of ownership". Rather, they

Page 45 merely assert or describe ownership. They typically fail to identify specifically the source of the assertions. As such, they are not, in my opinion, documents which "would only have been executed by a person in possession". Further, the evidence on the status of exhibition catalogues indicates that attributions to collections may be deliberately uninformative or fictional. [290] I do not consider that exhibition catalogues, in the ordinary course, constitute ancient documents. Loan agreements, leases or licences executed in relation to paintings, if over 20 years old, would satisfy the applicable tests, as they show on their face an exercise of ownership. A lease is the paradigm example of an "ancient document". There is, in my opinion, no basis in the authorities for restricting the application of the doctrine to leases or licences relating to interests in land. 10 VR 626 at 672 K. The documents [291] The parties made detailed submissions in relation to each of the documents. Each is discussed below. In order to avoid undue repetition, I consider the questions of admissibility, meaning and weight together, in relation to each document or statement. In each case, I bear in mind the level of scrutiny and caution required by the nature of the claim and the peculiar circumstances already discussed. 1. Documents relating to "Italian Crucifix" 1955 (Document numbers are taken from the plaintiff's schedule.) Document 1.1 -- Redfern Gallery catalogue 1955, with notations in handwriting [292] The Redfern Gallery catalogue (3-28 May 1955) contains notations in handwriting identified by the plaintiff as that of Sidney Nolan. There is a typed list of paintings including "No 19 -- Crucifix -- Puglia" with the figure "200" and "Cynthia" in brackets written next to it in the handwriting of Sidney Nolan. [293] The plaintiff submits that the statement is that of Sidney Nolan and is to the effect that Cynthia is the designated owner of the painting (submitted to be identifiable with "Italian Crucifix" 1955). [294] Although "statement" is widely defined in the Act to include a representation of fact whether made in words or otherwise, I am unable to attribute any unambiguous meaning to the notation. While the notation might be consistent with Cynthia's ownership of the painting, it is equally consistent with a range of other possible meanings. The figures written next to titles may represent prices asked or obtained. There is nothing within the document to indicate that "No 19 Crucifix, Puglia" is identifiable with "Italian Crucifix" 1955 (although a later document (No 1.4) suggests a link, despite different spelling). In my opinion, the notation does not satisfy the primary condition of s 55(1) that it be a statement tending to establish a particular fact. The "statement" is therefore not admissible under s 55(1) of the Act. [295] While some statements of the ancient documents doctrine require that the document in question itself constitutes an act of ownership, even the more liberal statement of the doctrine in Blandy-Jenkins, requires that the document show on its face an exercise or act of ownership. That requirement is not satisfied. The document is therefore not admissible as an ancient document. [296] For the reasons expressed above, in my opinion the notation does not constitute an admission by Sidney Nolan against interest. [297] If the above be incorrect and the document or notation therein is admissible, I would attribute no weight to it in establishing Cynthia's ownership of "Italian Crucifix" 1955. The notation does not clearly refer to that painting and is in any event susceptible of an indefinite number of equally tenable constructions. I am unable to attribute any specific meaning to it. Document 1.2 -- Proposed exhibition checklist of paintings marked "Paintings Sidney Nolan for Helen Kapp, Wakefield Gallery" circa 1956

Page 46 [298] The document is a list entitled "Paintings -- Sidney Nolan -- for Helen Kapp, Wakefield Gallery". It is a single draft page, containing a typed list of paintings with some handwritten additional notations. It contains, inter alia, the handwritten notation "Wakefield Italian Crucifix coll Cynthia Nolan (48 x 36")". The dimensions accord with those of "Italian Crucifix" 1955. Mr Smith identified the handwriting of the notation as that of Sidney Nolan. 10 VR 626 at 673 [299] I consider that the statement is admissible under s 51(1)(a) of the Act, on the basis that I may infer, pursuant to s 55C that Sidney Nolan had, at the time of making the statement, personal knowledge of the matters dealt with by the statement. Although he is not called as a witness, Sidney Nolan is dead. [300] If the statement in the document is admissible under s 55(1)(a) it is unnecessary to determine whether it would also be admissible under s 55(1)(b). There is no evidence before the court as to what the document is, or where or in what circumstances it was created. It was produced from the Cynthia Nolan Papers. The circumstances of the deposit of the Cynthia Nolan Papers, the incomplete examination for the purposes of this proceeding and the restricted access to them is discussed above. [301] In the circumstances, I do not consider that there is evidence on which to conclude that the document is, or forms part of, a record relating to Sidney Nolan's business, made in the course of that business. [302] The relevant notation is contained in an informal, undated draft document of inherently uncertain status. The document is derived from a source which may not be comprehensive, has not been exhaustively examined, and cannot be tested by the defendants, due to limited access. Exercising the scrutiny and caution required in the circumstances, I do not construe the statement to mean that "Italian Crucifix" 1955 was, at the date of the notation, in the collection of Cynthia. The notation may be a mere private jotting, never intended by its maker to be communicated to another party. It may represent an intention to transfer the painting to the collection of Cynthia, in the future, conditionally or unconditionally. A number of other constructions are possible. There is nothing to indicate that it is a conclusive statement intended to be made public, to affect rights or to bind the maker. It is not possible to conclude that it was not qualified or contradicted by other documents which have not been produced. [303] I also note that attribution to a collection, in any event, is not equivalent to an acknowledgment of absolute ownership. That is discussed in detail above. While there are a number of paintings by Sidney Nolan entitled "Italian Crucifix" (or similar), the stated dimensions accord with those of the painting of that title in dispute in the current proceeding. While the possibility that there is more than one painting of the same name and the same dimensions cannot be excluded, it is a reasonable inference to draw, under s 55C, that the painting referred to in the notation is the painting in dispute. That inference, however, does not overcome the problem that no unequivocal meaning can be attributed to the notation. [304] The above circumstances could be said to justify rejection of the statement pursuant to s 55(9) of the Act. However, in my view, the preferable course is to admit it, but to attribute to it little or no weight. The notation does not, in my opinion, constitute evidence that at the date of the statement (which is unknown) "Italian Crucifix" 1955 formed part of Cynthia's collection, or that it was at that date publicly acknowledged by Sidney Nolan to be part of that collection or otherwise the property of Cynthia. Document 1.3 -- Letter dated 9 January 1956 from L Somerville to Sidney Nolan [305] The letter appears, on its face, to be from the Director of the Fine Arts Department of the British Council, Mrs L Somerville, to Sidney Nolan. Although dated, it is unsigned and the enclosures referred to in the letter are not attached. The letter is derived from the Cynthia Nolan Papers, the status of which is discussed above. 10 VR 626 at 674 [306] The letter refers in part to the framing of certain paintings, in particular "the Italian Crucifixion belonging to Cynthia". It also refers to more personal matters. Although the relevant painting is described as "belonging to Cynthia" the letter seeks Sidney Nolan's consent to removing its frame, suggesting that he retained some control over it.

Page 47 [307] In view of the fact that the letter is unsigned, and given its source of production, although references to framing relate to an artist's occupation or business, I do not conclude that the document is, or forms part of, a record relating to Sidney Nolan's business, made in the course of the business. It is therefore not admissible under s 55(1)(b) of the Act. [308] If that conclusion be incorrect, I would exercise my discretion to exclude the document under s 55(9) as there are no means of identifying to which of the several paintings of an "Italian Crucifixion" or similar, the letter refers. No dimensions are recorded and the plaintiff acknowledges that a painting of similar title was an asset of Cynthia's estate, and was subsequently sold. The statement is therefore irrelevant. Alternatively, no weight could justifiably be attributed to the statement. Document 1.4 -- Catalogue of Whitechapel Art Gallery, London, June-July 1957 [309] The Whitechapel catalogue lists item 60n as:
Italian Crucifix 1955 P1 XVI ripolin on masonite 36 x 48" Exhib. Paintings by S N, Redfern Gallery, London: May 1955: cat 19 as "Crucifix -- Apulia" Collection: Cynthia Nolan.

[310] I consider that the statement is admissible as being contained in a document forming part of a business record of the Whitechapel Gallery, pursuant to s 55(1)(b) of the Act. The gallery constitutes a "business" within terms of s 3 of the Act. From Ms Haythornwaite's evidence I infer that the document forms part of the record of the business, which, pursuant to s 55C, I infer was made in the course of the business. Although the supplier of the information cannot be certainly identified, I infer that it was either Sidney Nolan or Cynthia. The catalogue's preface acknowledges the collaboration of Cynthia and Sidney Nolan in preparing the catalogue. Neither Cynthia nor Sidney Nolan can be called as a witness, as both persons are now dead. [311] I do not construe the relevant statement as an admission by Sidney Nolan against interest, as it is equally likely to be a statement by Cynthia. It is not possible to ascertain which statements were made on the basis of information from Cynthia, and which were made on the basis of information from Sidney Nolan. There is no external evidence that Sidney Nolan had any input into the preparation of the catalogue or was aware of, and approved, its contents. [312] I do not consider the catalogue admissible as an ancient document, for the reasons expressed above. [313] Although the statement is admissible, it is not established that it was based on information supplied by Sidney Nolan or that he approved the attribution. Sidney Nolan cannot now be called to give evidence on the circumstances of the attribution. Exercising the required scrutiny and caution, I do not consider that the statement constitutes an acknowledgment by Sidney Nolan that "Italian Crucifix" 1955 belonged to Cynthia's collection. 10 VR 626 at 675 [314] If that be incorrect, and the statement may properly be viewed as a statement made from information by Sidney Nolan and approved by him, I do not consider that the attribution of the painting to the collection of Cynthia would establish that Cynthia was the owner of the painting. [315] First, in my opinion, as discussed above, the approval of the attribution in a gallery catalogue of a painting to the collection of a nominated person is not a reliable acknowledgment that that person is the absolute owner. [316] Secondly, even if the statement were made by Sidney Nolan himself, and amounted to words of gift or constituted a clear acknowledgment that the painting was the property of Cynthia, delivery would also be

Page 48 necessary to transfer property to Cynthia by way of gift. That requirement is discussed below. Whitechapel Gallery loan agreement [317] The plaintiff also seeks, in relation to the Whitechapel catalogue, to rely on a "loan agreement" of Whitechapel Gallery and Cynthia which, on its face, records an agreement by Cynthia to loan certain paintings, including "Italian Crucifix" 1955, to the Whitechapel Gallery. [318] I consider that the loan agreement forms or is part of a record of the business of the Whitechapel Gallery. [319] I also consider that the loan agreement is an ancient document, in that it is more than 20 years old and constitutes an act of ownership. Further, it is produced from the records of the nominated borrower or "licensee", the Whitechapel Gallery. Such a source is the expected source and hence "proper custody". [320] As recognised in Malcomson v O'Dea, it is a question of what weight should be attributed to such a document in the absence of proof of possession, payment of rent or other circumstances. In the present case, I consider that the Whitechapel Gallery loan agreement establishes that Cynthia represented herself as having such interest in the paintings as entitled her to loan them to Whitechapel Gallery in 1957. [321] However, such an interest is not necessarily equivalent to absolute ownership but could be more limited, such as a life interest, a mere right to possession or a conditional interest. [322] Further, the fact that Cynthia represented herself as owner was clearly not against interest. Cynthia and Sidney Nolan are dead and the representation cannot be tested. The loan document is not evidence that Sidney Nolan represented Cynthia as entitled to any interest entitling her to lease "Italian Crucifix" 1955. Document 1.5 -- A letter from J Wood Palmer (of the Arts Council of Great Britain) to Sidney Nolan, dated 31 July 1957 [323] The letter is unsigned. It is produced from the Cynthia Nolan Papers. There is no evidence that Sidney Nolan received the letter. The letter refers to the sales of paintings. It also states that there are forms enclosed for signing by Sidney Nolan's wife and daughter. It is apparent from the letter, and I infer, that Cynthia had conveyed certain information to the author and that Sidney Nolan had sent the author a letter. [324] The letter might be viewed as a record, or forming part of a record, of the business of Sidney Nolan, made in the course of that business from information supplied by Cynthia or by Sidney Nolan, save that it is unsigned and is produced from the Cynthia Nolan Papers. One would expect the business records of Sidney 10 VR 626 at 676 Nolan to contain a signed letter, if it had been received. In view of those circumstances, I do not consider that the statement is admissible under s 55(1)(b) of the Act. [325] If it were admissible I would not accept that the effect of the statement is that asserted by the plaintiff. It is not clear that the "forms" referred to in the letter are loan agreements in relation to paintings owned by Cynthia and Jinx Nolan. [326] If the statement were admissible, exercising the required scrutiny and caution, I do not consider that it would establish that the forms referred to in the letter included a form in relation to a painting in dispute, or that Sidney Nolan saw that form and acquiesced in Cynthia's completion of it as owner. I do not conclude that Sidney Nolan procured Cynthia's signature to the loan agreement which is document 1.6. Document 1.6 -- Arts Council of Great Britain loan agreement dated 14 August 1957 [327] The agreement is signed and the signature of Cynthia was identified by Ms Jinx Nolan. The document is a loan agreement pursuant to which Cynthia agreed to loan "Italian Crucifix" 1955. [328] I consider that the document is admissible as an ancient document. It is over 20 years old, constitutes an assertion of ownership by Cynthia and is produced from the custody of the borrower or licensee (by

Page 49 derivation). [329] I consider that the statement (constituted by the entire document) is also admissible as a business record of Cynthia under s 55(1)(b) of the Act (given the breadth of the definition of "business" in s 3 of the Act). There is evidence that Cynthia wrote travel books relating to Sidney Nolan's art, owned and sold paintings by Sidney Nolan and had her own business address. The loan of paintings may be considered to be part of her occupation or calling, which, pursuant to s 3 of the Act, need not be carried on for profit. [330] I accept that in the document, Cynthia asserts herself to be the owner of the painting "Italian Crucifix" 1955 as at 14 August 1957 and reference is made to conditions of loan stated in the Arts Council letter of 31 July 1957. (I note that that letter cannot be, apparently, the unsigned letter of J Wood Palmer (document 1.5), which does not contain conditions of loan.) [331] An assertion of ownership by Cynthia does not establish that Sidney Nolan had made a valid gift to her. There is, in my opinion, no admissible evidence to establish that Sidney Nolan saw and approved the loan agreement. If there were evidence to that effect, it would still be necessary to establish that such conduct constituted a sufficient manifestation of donative intention, together with delivery of possession. Document 1.7 -- Catalogue of the Arts Council of Great Britain Sidney Nolan exhibition, 1957 [332] There is no proof of the admissibility of the catalogue of the Arts Council of Great Britain. In those circumstances, it is inadmissible. Document 1.8 -- Catalogue of the Art Gallery of New South Wales -- Sidney Nolan Retrospective Exhibition of Paintings from 1937 to 1967 -- Exhibitions in Australia from 13 September 1967 to 4 February 1968 [333] The plaintiff seeks to rely on the whole catalogue as evidence of Sidney Nolan's direct involvement in its production and publication. 10 VR 626 at 677 [334] The particular statement sought to be admitted is that the painting "Italian Crucifix" 1955 is listed as being in "private collection" by reason of the general statement in the catalogue that, unless otherwise indicated, "paintings are from private collections". There is no indication of any collection in relation to "Italian Crucifix" 1955. [335] In the acknowledgments, the catalogue states "we are especially indebted to the artist and his wife, Cynthia, for their long patience in bearing with the seemingly never ending questions-and-answers involved in preparing the catalogue". [336] I consider that the statement that "Italian Crucifix" 1955 belongs to a private collection is admissible, as being contained in a document being or forming part of a record relating to the business of the Art Gallery of New South Wales. I infer, pursuant to s 55C of the Act, that the relevant information was supplied by Sidney Nolan or by Cynthia, who may be reasonably supposed to have had personal knowledge of the information supplied. [337] I do not consider that the catalogue as a whole is admissible, as the relevance of the balance of it to issues in dispute in this proceeding is not apparent. [338] I do not consider that the catalogue is admissible as an ancient document, for the reasons set out above. [339] In attributing weight to the statement, I must scrutinise it carefully and exercise caution. On the balance of probabilities, I consider that "Italian Crucifix" 1955 was attributed to a "private collection" in the catalogue on the basis of information supplied by Cynthia or Sidney Nolan, but it is not possible to conclude which of those two persons supplied the information. It is likely that Cynthia and Sidney Nolan each answered questions in relation to preparation of the catalogue. It is not possible to determine the degree or nature of Sidney Nolan's involvement in the preparation, or to identify the information he

Page 50 supplied. [340] It is not possible to determine whether either or both of them were satisfied with the catalogue which was ultimately produced or considered that it accurately reflected any information that they had supplied. [341] The New South Wales Art Gallery Sidney Nolan Retrospective catalogue 1967 therefore does not assist in the determination of whether, as at the date of its publication, "Italian Crucifix" 1955 belonged to the collection of Cynthia or Sidney Nolan. It does not constitute evidence that Sidney Nolan publicly acknowledged Cynthia's ownership of the painting. Document 1.9 -- Letter from Hal Missingham to Sidney Nolan dated 13 January 1967 [342] The letter from Mr Missingham of the Art Gallery of New South Wales reports to Sidney Nolan on various matters concerning the planned retrospective exhibition and lists certain queries. Under "1952-1956 London -- Greek -- Italian -- 2nd Kellys" it states "Need 3 more, a good Greek one, an Italian one (Cynthia's)". [343] I consider that the letter is admissible pursuant to s 55(1)(a) and (b) of the Act, as being, or forming part of, a record relating to the business of the Art Gallery of New South Wales, made in the course of the business from information supplied by a person who may reasonably be supposed to have personal knowledge of the matters dealt with. In my opinion, as the letter is principally a request for instructions or responses, that person is the author, Mr Missingham. 10 VR 626 at 678 [344] Further, the letter contains statements, and it may be inferred that their maker, Mr Missingham, at the time had personal knowledge of the matters dealt with by the statements. The statements are therefore admissible pursuant to s 55(1)(a) of the Act. [345] The plaintiff seeks admission of the whole letter rather than particular statements. The plaintiff contends that the letter is part of the correspondence:
... which provides a flow of information between the director of the gallery, Hal Missingham and the artist Sidney Nolan, in preparation for the exhibition and the production of the catalogue for the exhibition. It evidences the practice of Sidney Nolan to be directly involved in planning for exhibitions of his works in public galleries.

[346] I do not consider that the letter, taken in isolation, evidences interchange between Mr Missingham and Sidney Nolan in relation to the retrospective exhibition. When taken in conjunction with other admissible documents or statements (see 1.10) it may do so. [347] The letter states "Need 3 more, a good Greek one, an Italian one (Cynthia's)" for the years 1952-56. I do not consider that the statement establishes more than that Mr Missingham believed Cynthia to own, or have entitlements to, a painting of Italian subject matter, or painted in Italy, during the designated period. Document 1.10 -- Letter from Sidney Nolan to Hal Missingham dated 28 April 1967 [348] The plaintiff seeks to admit the whole letter, and, in particular, the statement:
Could you put my paintings and Cynthia's in the catalogue under private collection

and
Probably just a note at the end to say: unless otherwise indicated the paintings are from private collections.

[349] The plaintiff contends that the letter establishes that Sidney Nolan admitted that some of the paintings for the 1967 retrospective exhibition were owned by himself and some by his wife, Cynthia.

Page 51 [350] In my opinion, the letter is a document being or forming part of a record relating to the business of the Art Gallery of New South Wales, made in the course of that business from information supplied by Sidney Nolan, who may be reasonably supposed to have had personal knowledge of the matters dealt with in the information supplied. Statements in the letter may therefore be admissible pursuant to s 55(1)(b) of the Act. [351] Statements in the letter are also admissible under s 55(1)(a) of the Act. The maker of the statements in the letter may be inferred to have had personal knowledge of the matters dealt with at the time of making them, and, although not called as a witness, is dead. [352] The letter does not identify a final and exhaustive list of the paintings which were to be exhibited at the retrospective exhibition. Exercising the required scrutiny and caution, I do not accept that the letter constitutes evidence that Sidney Nolan admitted that of the paintings ultimately exhibited from July 1967 to February 1968, some were owned by Cynthia and some by himself. [353] I consider that the letter establishes no more than that Sidney Nolan acknowledged that of the paintings contemplated as loans to the retrospective exhibition at the date of the letter (which are not specifically identified) some were his own and some were Cynthia's. 10 VR 626 at 679 [354] That acknowledgment cannot be specifically applied to "Italian Crucifix" 1955, although that painting was ultimately exhibited. Moreover, it does not assist in determining the relative entitlements of Cynthia and Sidney Nolan to "Italian Crucifix" 1955. Document 1.11 -- Letter from Sidney Nolan to Hal Missingham dated 21 January 1967 [355] The letter states: "52-56 -- Have three more. Cynthia's Italian one." The statements made in the letter are made by a person, Sidney Nolan, who had personal knowledge of the matters dealt with in the statements at the time of making them and who, although not called as a witness in the proceeding, is now dead. The statements are therefore admissible pursuant to s 55(1)(a) of the Act. [356] In my opinion, the letter is a document being or forming part of a record of the business of the Art Gallery of New South Wales, made in the course of the business from information supplied by Sidney Nolan, who may reasonably be supposed to have had personal knowledge of the matters dealt with in the information supplied. Sidney Nolan, although not called as a witness, is now dead. Statements in the document are therefore admissible pursuant to s 55(1)(b) of the Act. [357] I consider that this letter, which appears to be in response to the letter of Hal Missingham dated 13 January 1967 (document 1.9) is evidence of Sidney Nolan's exchange of information and involvement in planning for the Art Gallery of New South Wales retrospective exhibition. However, I cannot infer from the letter any reliable or invariable practice of such involvement in relation to other exhibitions. [358] The reference to "Cynthia's Italian one" is evidence that Sidney Nolan acknowledged an "Italian" painting as "Cynthia's". Exercising the required scrutiny and care, I am unable to conclude that that general description applies to "Italian Crucifix" 1955. [359] There were several "Italian Crucifix" paintings by Sidney Nolan and other Nolan paintings of "Italian" subject matter. In so far as the reference suggests that only one was known as "Cynthia's" (as there is no attempt to distinguish it from any other "Italian" painting of "Cynthia's") -- it does not assist the plaintiff. (Sidney Nolan did not dispute that a painting on the Italian Crucifix theme was an asset of Cynthia's estate.) I am unable to conclude that the letter refers to "Italian Crucifix" 1955 because that was the painting ultimately exhibited. The letter is also consistent with Sidney Nolan's continued control over, or access to, "Cynthia's Italian one". I do not consider that the letter constitutes an acknowledgment by Sidney Nolan that Cynthia owned "Italian Crucifix" 1955. Document 1.12 -- Art Gallery of New South Wales original typescript notes with handwritten corrections for printer

Page 52 [360] The document appears to be, or form part of, a record relating to the business of the Art Gallery of New South Wales made in the course of the business. It is not apparent from the document who made the statements, or who supplied the information from which the record was made. I therefore consider that the statement is not admissible pursuant to s 55(1)(b). [361] If that be incorrect, and the statement "Italian Crucifix 1955 illustrated (36 x 46 ripolin on board Coll of Cynthia Nolan" is admissible, it would be consistent with the request of Sidney Nolan that any paintings of his or Cynthia's should 10 VR 626 at 680 have no specific attribution in the catalogue, but should be comprehended by a general attribution to "private collection". [362] If Sidney Nolan did give instructions for the relevant entry, in my opinion it does not support the contention that he acquiesced in, or agreed to, the public attribution in the catalogue, of "Italian Crucifix" 1955 to Cynthia's collection. Although the measurements of the "Italian Crucifix" 1955 referred to in the document accord with those of the painting in dispute, the notation "Coll: Cynthia Nolan" is struck through. If that were done at the behest of Sidney Nolan, it suggests that he was unwilling to identify or hold Cynthia out as entitled to that painting and preferred to keep the respective entitlements of Cynthia and himself private. It is not established that this is the painting described by Sidney Nolan as "Cynthia's Italian one" referred to in the letter of 21 January 1967 (document 1.11). There is also annexed a list of "works from the artist's studio", listing No 40 "Italian Crucifix" 1955 as "collection: Cynthia Nolan". Exercising the care and scrutiny required, I do not construe this as an acknowledgment of Cynthia's ownership of "Italian Crucifix" 1955 by Sidney Nolan. Document 1.13 -- Handwritten list headed "collection Cynthia Nolan" [363] This is an undated handwritten list of paintings, including No "55. Crucifixion Sth Italy 36 x 48" and No "46. Hare in Trap 36 x 48". [364] The list is headed in barely legible handwriting:
collection Cynthia Nolan -- [with]? Elwyn Lynn Curator, Power Gallery. Sydney University for gradual sale to benefactor to give to Power Gallery when [buyer] or as my trustees see fit.

[365] On p 2, is written "Collection Cynthia Nolan Paintings collected from 62 Deodor Rd 30 April 74 from C Hansen to Pickfords Litchfield Terrace; then to Aus on loan Syd Uni Jack Lynn". [366] The handwriting was identified by the plaintiff as that of Cynthia. [367] I consider that statements in the list are admissible pursuant to both s 55(1)(a) and (b) of the Act, in that Cynthia's dealings constituted a business within the definition of s 3 of the Act. I infer that the record was made in the course of that business from information supplied by Cynthia. The list is produced from the Cynthia Nolan Papers. [368] The document is evidence that Cynthia included the paintings "Hare in Trap" and "Crucifixion Sth Italy" (with the measurements of the painting of the title "Italian Crucifix" in dispute in this proceeding), in a list headed "collection Cynthia Nolan". The handwritten notations indicate that Cynthia claimed or described the paintings as being within her collection. It may also be inferred that Cynthia intended that the paintings be collected from the Nolan's Putney residence and ultimately despatched to the Power Gallery, University of Sydney. [369] The document, in my opinion, indicates that Cynthia asserted rights or claims of entitlement to the paintings in the list. She also recorded an intention to despatch them, which, if implemented, would be consistent with her exercise of possession, dominion and control of the paintings. [370] The assertion by Cynthia of such entitlement and the exercise of control, while consistent with her

Page 53 ownership of the paintings by way of gift, is equally consistent with a number of other possibilities. It is consistent with Cynthia misappropriating the paintings or asserting rights contrary to Sidney Nolan's wishes and consent. It is consistent with Cynthia having received the promise of 10 VR 626 at 681 a gift from Sidney Nolan and, believing the paintings to belong to her, taking possession for herself. Exercising the required scrutiny and caution, I do not construe the document as evidence of Cynthia's ownership of the paintings, or evidence that Sidney Nolan acknowledged Cynthia's ownership of the paintings or that he made delivery of the paintings to her. Document 1.14 -- Statement by Elwyn Lynn of the Power Gallery of Contemporary Art, University of Sydney dated 21 November 1974 [371] The typewritten document lists paintings including "Hare in Trap" (No 2) and "Italian Crucifixion 1955 361/8 48" (No 13) which are stated to be loaned to the Power Gallery by Cynthia. [372] The document is executed by Elwyn Lynn as curator. It is not executed by Cynthia, although there is space for execution by "Cynthia Hansen-Nolan". [373] Statements in the document would be admissible pursuant to s 55(1)(a) of the Act, as Elwyn Lynn is the maker of the statements (inferred pursuant to s 55C and the evidence of Tim Kelly). [374] On its face the document might constitute a business record of the business of the Power Gallery, albeit produced from David Jones files. However, one of the few examples of direct evidence relating to a transaction in this case was that given by Mr Tim Kelly. Mr Kelly's evidence was that he believed that the deposit of paintings at the Power Gallery was not a loan by Cynthia to the Power Gallery, but a private arrangement between Cynthia and Elwyn Lynn. If that were the case, the document misrepresents the transaction it purports to record. [375] Mr Kelly's evidence could constitute a reason to decline to admit the document, or statements contained in it, pursuant to s 55(9) of the Act. [376] There is evidence that Cynthia arranged the Power Gallery deposit without Sidney Nolan's knowledge or consent. That might also constitute a basis for rejection. I will not, however, exercise my discretion to refuse to admit the document. [377] The document is not signed or executed by Cynthia. In my opinion, on the construction most favourable to the plaintiff, it can establish no more than that a third party, on the balance of probability, Cynthia (who was evidently expected to execute a version of the statement) had represented to Elwyn Lynn that Cynthia had a sufficient interest in the listed paintings to lend them to the Power Gallery and had indicated a willingness to do so. The precise nature of Cynthia's entitlement is not defined in the document. There is no evidence that Sidney Nolan was aware of, or approved a loan to the Power Gallery or the representation in the document of Cynthia as lender or owner of the collection. On the construction least favourable to the plaintiff, the document was prepared as a misleading record of the true transaction, for purposes which cannot now be fully ascertained. [378] In my opinion, the statements in the document do not establish that Sidney Nolan acknowledged or held Cynthia out as owner of the paintings, approved her dealings with the Power Gallery or delivered the paintings into her possession. [379] On the basis of Mr Kelly's evidence and the related correspondence between Cynthia and Elwyn Lynn, I find that Cynthia (whatever her entitlement) despatched and dealt with the paintings without Sidney Nolan's consent, deliberately concealing her actions from him. As I must, in any event, approach a claim against Sidney Nolan's deceased estate with caution, the probability of such conduct by the alleged donee is a strong reason for added caution. 10 VR 626 at 682 Document 1.15 -- David Jones Art Gallery catalogue -- "The Cynthia Nolan Collection of Paintings

Page 54 by Sidney Nolan" 7-20 July 1975 [380] The David Jones Art Gallery catalogue entitled "The Cynthia Nolan Collection of paintings by Sidney Nolan" lists as No 2 "Hare in Trap" 1946 and as No 13 "Italian Crucifixion" 1955 with measurements 91.7 121.9 cm (identifiable with the measurements of the painting the subject of this proceeding). [381] In my opinion, the David Jones Art Gallery catalogue (or statements therein) are admissible as being or forming part of a record of the business of the David Jones Art Gallery made (probably by Robert Haines, the director) in the course of the business from information supplied by a person, Cynthia (whether directly or indirectly through Elwyn Lynn or others, as I infer pursuant to s 55C) who might reasonably be supposed to have had personal knowledge of the matters dealt with. [382] I consider that the catalogue constitutes only an attribution by Cynthia, or by third parties other than Sidney Nolan, of the paintings in question to her "collection". The evidence is that Sidney Nolan did not know of, or participate in, the despatch of paintings to the Power Gallery, the attempted sale of any of those paintings, the David Jones Art Gallery exhibition or the production of the David Jones Art Gallery catalogue and the attribution therein of the paintings to Cynthia's collection. [383] There is no evidence that Sidney Nolan consented to Cynthia's control of, or dealings with, the paintings. There is no evidence that he represented Cynthia as the owner of the paintings or consented to the attribution in the catalogue. On the contrary, it is not disputed that he did not, at first, know of the David Jones Art Gallery exhibition and that he was displeased when he subsequently learnt of its occurrence. [384] Given that the parties are long dead, I must view with considerable caution a statement by a dead person, Cynthia, which is not against interest, asserting entitlement against another deceased party's estate, even if the statement is rendered admissible through s 55(1) of the Act. The statements in the catalogue are equally consistent with self-serving conduct and unauthorised activity by Cynthia. Evidence of Ms Sloggett [385] The evidence of Ms Sloggett identified a label on the top left of the verso of the painting "Italian Crucifix" 1955 which read "Art Gallery of New South Wales Sidney Nolan September 12 - October 20 1967 Italian Crucifix". [386] The plaintiff contends that the label establishes that "Italian Crucifix" 1955 is thereby proved to be directly linked to the correspondence between Sidney Nolan and Hal Missingham, and the Art Gallery of New South Wales list of works. [387] Ms Sloggett gave no evidence that the label was attached by the servants or agents of the Art Gallery of New South Wales at the date of, and for the purposes of, the 1967 retrospective exhibition. She merely identified the label. If it be authentic, in my opinion, it does not establish the link for which the plaintiff contends. Hal Missingham's letter dated 13 January 1967 refers only to "Cynthia's Italian one". Sidney Nolan's letter of 28 April 1967 refers merely to "my paintings and Cynthia's" and Sidney Nolan's letter of 21 January 1967 refers only to "Cynthia's Italian one". [388] There are a number of Sidney Nolan "Italian" paintings, only some of which are based on the theme of "Italian Crucifix". It is not possible to conclude that in referring to the painting in the correspondence with no more specificity than 10 VR 626 at 683 "Cynthia's Italian one" Mr Missingham and Sidney Nolan had in mind "Italian Crucifix" 1955, even if that painting were the "Italian" painting ultimately exhibited at the Art Gallery of New South Wales retrospective exhibition. Exercising the required care and scrutiny, I cannot confidently conclude that the record of their correspondence is complete, or was not supplemented by conversations whereby the parties changed their original intentions and substituted "Italian Crucifix 1955" for the "Italian one" originally contemplated. [389] I consider, however, that to the extent to which the list of works (document 1.12) which lists as No 40

Page 55 "Italian Crucifix 1955 ripolin on board 36 48" is itself admissible, the label does constitute a link with it and indicates that "Italian Crucifix 1955" (the painting the subject of the present proceeding) was the painting exhibited at the Art Gallery of New South Wales in 1967. [390] I note that Ms Sloggett's evidence did not establish the presence of a marking "In the possession Cynthia Nolan" on the painting in dispute. Document 1.16 -- Colin MacInnes -- Book entitled Nolan [391] The plaintiff does not, in final written submissions, indicate what portion of the book is sought to be admitted, save for the printed notice on the inside of the front dust cover which states that:
The first monograph to be produced in Europe on an Australian artist, this volume was devised by Bryan Robertson, Director of the Whitechapel Gallery, in collaboration with the artist.

[392] The defendants object to the admission of the whole book, but seek the admission of CB 349-51 (an introduction page, pictures of "Hare in Trap" 1946 and "Italian Crucifix" 1955) and plate 50 "Ram Caught in Flood", which pages were referred to in the plaintiff's witness statement and in other evidence. [393] Relevance is a precondition of admissibility. The relevance of the parts of the book not specified by the parties is not apparent. They should be excluded. The dust cover notes, CB 349-51 and plate 50 only should be admitted. [394] Plate 3 lists "Hare in Trap" 1946 as "collection the artist". Plate 81 lists "Italian Crucifix" 1955 as "collection Cynthia Nolan". There is no external evidence to establish that Sidney Nolan collaborated with the author, supplied the relevant attributions or acquiesced in or approved them. Exercising the required scrutiny and caution, I do not consider that this constitutes an acknowledgment by Sidney Nolan that he had made a valid gift of "Italian Crucifix" 1955 to Cynthia, or that it was her property. Document 1.17 -- Proposed exhibition checklist marked "Paintings Sidney Nolan for Helen Kapp, Wakefield Gallery" [395] The plaintiff does not persist with her submission in relation to this document. It is not admitted. Document 1.18 -- Sidney Nolan diary notes, Monday, 9 February 1959 [396] The diary notes include the statement "send photographs to Marie Seton for her article". [397] Mr Smith identified the handwriting as that of Sidney Nolan. [398] In my opinion, the statement is admissible pursuant to s 55(1)(a) of the Act, as I infer that Sidney Nolan had, at the time of making it, personal knowledge of the matters dealt with, and although not called as a witness, is now dead. 10 VR 626 at 684 [399] The weight to be attributed to the statement is considered in relation to document 1.19 below. Document 1.19 -- Article "Sidney Nolan -- An Artist of the Antipodes" by Marie Seton in The Painter and Sculptor London, Summer, 1959 [400] The plaintiff seeks to admit the statement referred to in document 1.18 in conjunction with the article by Marie Seton entitled "Sidney Nolan -- An Artist of the Antipodes", in The Painter and Sculptor, London, Summer, 1959. In that article, there is a photograph apparently of "Italian Crucifix" 1955 (although the dimensions are not stated), ascribed to the "(Collection: Cynthia Nolan)". [401] I am unable confidently to conclude from the diary note indicating that Sidney Nolan intended to send photographs to Marie Seton for her article that he did send that photograph for inclusion in this article;

Page 56 and, in particular, that he furnished the information that "Italian Crucifix" 1955 was from "Collection: Cynthia Nolan". While it is likely that Sidney Nolan did arrange or instruct that photographs be sent to Ms Seton for the article, he may have delegated that task to others and he may not have supplied the accompanying information. As Sidney Nolan is deceased and Ms Seton is not called to give evidence, in my opinion, exercising the required scrutiny and caution, it would be unsafe to construe this as a public acknowledgment by Sidney Nolan that "Italian Crucifix" 1955 was in the collection of Cynthia Nolan. Conclusion on donative intention -- "Italian Crucifix" 1955 [402] From the above it follows that, in my opinion, the documents relied on by the plaintiff do not contain, in terms, an unequivocal statement made, or alternatively approved, by Sidney Nolan to the effect that he was making or had made an gift of "Italian Crucifix" 1955 to Cynthia or acknowledged it to be her property. For reasons discussed above, I do not consider ascription to a collection in an exhibition catalogue as tantamount to an acknowledgment of absolute ownership. Further, the principal formal assertions of Cynthia's ownership or ascriptions to her collection are either certainly made by Cynthia herself or possibly made by Cynthia, rather than Sidney Nolan, or made on the basis of information which was, or may have been, supplied by Cynthia or persons other than Sidney Nolan. 2. Documents relating to "Hare in Trap" 1946 Document 2.1 -- Handwritten list by Sidney Nolan submitted to be prepared for New Metropole, Folkestone, exhibition in 1970 [403] The handwriting is identified by Ms Jinx Nolan as that of Sidney Nolan. [404] At the bottom right hand corner the words "Catalogue Folkestone Feb 20th 1970" are written. The list includes item 13 as "Hare in Trap" 1946 and next to it is written "Cynth". [405] Professor Eveleigh, the director of the New Metropole Gallery, Folkestone in 1970, gave evidence relating to this document in difficult and potentially confusing circumstances. He gave evidence by video link from England in two sessions. In the first session, on 3 December 2002, Professor Eveleigh had before him a different version of his witness statement from the version of the witness statement before the court and Mr Dreyfus QC, who was cross-examining him. Professor Eveleigh had a version of his witness statement dated 29 November 2002. An earlier version of his witness statement dated 28 November 2002 was before the court. The witness statement dated 28 November 2002 stated that document 2.1 was the list sent to Professor Eveleigh by Sidney Nolan in 1970 for 10 VR 626 at 685 use in the preparation of the New Metropole catalogue. The witness statement dated 29 November 2002 stated that Professor Eveleigh could not be absolutely sure that document 2.1 was the list sent by Sidney Nolan. Following the completion of the first videolink session, it became apparent that the witness statements were different. [406] Professor Eveleigh had, in cross-examination on 3 December 2002, initially stated that he could not be sure that the handwritten list (which is document 2.1) was the list sent to him by Sidney Nolan in 1970 for use in preparing the catalogue for the 1970 New Metropole exhibition. However, he thought that it was virtually identical. [407] In the course of further cross-examination on 9 December 2002, Professor Eveleigh agreed that on 29 November 2002 he had instructed that his witness statement dated 28 November 2002, be amended to state that he could not be absolutely sure that document 2.1 was the list sent by Sidney Nolan. [408] On 9 December 2002, Professor Eveleigh at first appeared to withdraw his assertion that he could not be sure it was the list that Sidney Nolan had sent. Ultimately he seemed to concede that it was not the list, but he thought that it corresponded almost exactly to the catalogue. [409] While I recognise the difficult circumstances of the video link, the response of Professor Eveleigh on this issue was confusing, shifting and evasive.

Page 57 [410] I am unable to place any confidence in the veracity and consistency of Professor Eveleigh's identification of document 2.1. I conclude that document 2.1 is not a list which Professor Eveleigh recollected as being sent to him, but rather, a list that the professor saw for the first time when it was sent to him by the plaintiff's solicitors. I conclude that he then noted the correspondence between that document and the 1970 New Metropole Gallery catalogue, and drew an inference from those correspondences. [411] A further relevant issue in Professor Eveleigh's evidence is the question whether he received Sidney Nolan's individual instructions and approval in relation to all the matters in the New Metropole catalogue. Professor Eveleigh gave evidence that he recalled a meeting at the Nolans' residence, at which both Sidney Nolan and Cynthia were present. He evinced some confusion as to the location of their residence, where the meeting took place. [412] When cross-examined as to whether he was able to recall any distinction between what Cynthia said and what Sidney Nolan said on the occasion of the meeting, Professor Eveleigh appeared evasive. Although he could recollect a comment by Cynthia concerning the proposed foreword to the catalogue and a comment by Sidney Nolan about the view of the Thames, I conclude that he was unable to remember whether any other specific instructions or information came from either person. [413] In the circumstances, I am unable to conclude that document 2.1 is the list sent by Sidney Nolan to Professor Eveleigh in 1970. I accept that the words "Cynth 13 Hare in Trap 1946" contained in the document, were written by Sidney Nolan. Exercising the required scrutiny and caution, I am, in any event, unable to construe those words as an unequivocal acknowledgment by Sidney Nolan of Cynthia's ownership of "Hare in Trap" 1946. 10 VR 626 at 686 Document 2.2 -- Catalogue for the Arts Centre, New Metropole, Folkestone, Kent published for the Sidney Nolan retrospective exhibition 21 February - 18 April 1970 [414] Item 14 is listed in the catalogue as "Hare in Trap 1946 36" x 48" ripolin lent by VC Nolan". [415] Professor Eveleigh identified the catalogue as being produced under his direction. The catalogue may, in my opinion, be admitted pursuant to s 55(1)(b) of the Act as a document which is, or forms part of, a record relating to a business, made in the course of the business of the New Metropole Art Gallery from persons who may reasonably be supposed to have had personal knowledge of the matters dealt with. The relevant persons in this instance are Cynthia and Sidney Nolan, who, although not called as witnesses, are dead. [416] It is not possible to determine whether the information that "Hare in Trap" 1946 was "lent by VC Nolan" was supplied by Cynthia or Sidney Nolan. I have already referred to the evidence of Professor Eveleigh on that issue. I consider that he was unable to recall, apart from some matters irrelevant to the issue, what particular instructions he received from whom in the course of his conversation with Cynthia and Sidney Nolan. Further, I consider that despite some contradictory assertions on his part, the ultimate effect of Professor Eveleigh's evidence was that he did not recognise the document 2.1, corresponding to the catalogue, as the list which was sent to him by Sidney Nolan. [417] In those circumstances, I am unable to infer that Sidney Nolan himself provided the instruction or information to list "Hare in Trap" 1946 as "lent by VC Nolan". [418] Professor Eveleigh's evidence was to the effect that Sidney Nolan did not express complaint about the catalogue. [419] I consider that I should accept that Sidney Nolan saw the attribution, whether he was the direct source of it or not, and did not complain to Professor Eveleigh, or to Professor Eveleigh's knowledge, anyone else. [420] It is possible, as the defendants submit, that he did dispute the attribution privately with Cynthia. There is no evidence that Sidney Nolan publicly disclosed his admitted displeasure over the David Jones Art Gallery exhibition. Given the scrutiny and caution which must be exercised in this context, I do not consider that the catalogue establishes that Sidney Nolan approved the public ascription of "Hare in Trap"

Page 58 1946 to Cynthia. [421] On the construction most favourable to the plaintiff, if Sidney Nolan knew of and approved the attribution of "lent by VC Nolan" to "Hare in Trap" 1946 in the catalogue, in my opinion, it is not sufficient to establish a complete gift of an absolute title to the painting. For reasons discussed in detail above, attributions in catalogues may not record entitlements accurately, for a range of reasons. Further, the mere statement by an original owner that a chattel has been given to someone else, or even that the owner "hereby gives" the chattel, is not sufficient to establish a perfect gift. It would also be necessary to establish the further requirement of delivery of possession to the intended donee. The fact that the purported donee obtains possession at a particular point cannot, without more, satisfy that requirement. The circumstances in which possession was obtained are all important. Possession may have been obtained without the purported donor's consent. An issue in the present case is whether the gift of a chattel can be established by the purported donor's admission or acquiescence in an assertion of 10 VR 626 at 687 the purported donee's ownership. I consider that relevant authority establishes that the mere admission by a donor of having made a gift, without more, cannot suffice. Document 2.3 -- Handwritten list of collection of paintings of Cynthia Nolan [422] The handwritten list of paintings has been considered in relation to document 1.13 above, in relation to "Italian Crucifix" 1955. The handwritten list includes as No 46 "Hare in Trap 30 48 ripolin" and is marked with a tick. The same conclusions apply as for item 1.13 in relation to "Hare in Trap" 1946. Statement of Elwyn Lynn of the Power Gallery of Contemporary Art, University of Sydney, 21 November 1924 [423] The statement has been considered in relation to "Italian Crucifix" 1955 as document 1.14 above. The document lists as No 2 "Hare in Trap" 1946 ripolin on masonite size 90.7 122.1 cm. The same conclusions apply in relation to "Hare in Trap" 1946. Document 2.4 -- Catalogue of David Jones Art Gallery "The Cynthia Nolan Collection of Paintings by Sidney Nolan", 7-26 July, 1975 [424] The David Jones Art Gallery catalogue for the Cynthia Nolan Collection of Paintings by Sidney Nolan, 7-26 July 1975 has been considered in relation to "Italian Crucifix" 1955 in relation to document 1.15. "Hare in Trap" 1946 is included in the catalogue as No 2. [425] The same conclusions as for "Italian Crucifix" 1955, set out in relation to document 1.15, apply. Conclusion on donative intention -- "Hare in Trap" 1946 [426] In my opinion, the documents relied on by the plaintiff do not contain an unequivocal statement made, or alternatively approved, by Sidney Nolan to the effect that he was making or had made gift of "Hare in Trap" 1946 to Cynthia or acknowledged it to be her property. 3. Documents relating to "Royal Hotel" 1948 Document 3.1 -- Extract from Sidney Nolan's Notebook 1974-75 [427] The diary extract has been recognised as being in the handwriting of Sidney Nolan. It has a list of titles of paintings in the top left hand corner, with a "C" to the right. There is a line drawn beneath those titles, and a single further title is written below it. [428] In so far as the diary extract contains a relevant statement, I consider that the statement would be admissible pursuant to s 55(1)(a) of the Act. The maker of the statement, Sidney Nolan, may be inferred to have had personal knowledge of the matters dealt with in the statement and, although not called as a

Page 59 witness, is dead. [429] In one sense, the evaluation of the weight to be attributed to the statement coincides with the question of admissibility. As a precondition of admissibility, it is necessary to identify a statement which tends to establish a fact. In the present case, I do not accept that the listing of the titles of several paintings above a line with a single letter "C" to the lower left above the line, constitutes a statement that the paintings listed above the line are the property of Cynthia; as such, there is no statement which tends to establish the fact that Sidney Nolan gave those paintings to Cynthia. If that construction be incorrect, and a statement to the effect alleged can be credibly construed from the writing in the diary 10 VR 626 at 688 extract, I would nevertheless attribute no weight to it. "C" is equally consistent with a number of meanings in addition to "Cynthia Nolan". If it did signify "Cynthia Nolan", the placing of "C" close to the titles cannot be assumed to signify that those paintings have been validly gifted to Cynthia. Document 3.2 -- Catalogue for the Moderna Museet Sidney Nolan exhibition in Stockholm 17 January - 7 March 1976 [430] The catalogue lists "Royal Hotel" 1948 122 91 as No 20 "tillhor" (Swedish for "belongs to") Mrs C Nolan. [431] I consider that the relevant statements contained in the catalogue are admissible, as being contained in a document which is, or forms part of, a record relating to the business of the Moderna Museet. [432] Given a finding that it is admissible on that basis, it is unnecessary to determine admissibility on alternate bases. However, for reasons given above, I consider that the doctrine of ancient documents should not be extended to apply to an exhibition catalogue, which does not show on its face an assertion of ownership, as do the documents held in decided cases to constitute ancient documents. Further, I do not consider that it should be admitted, by inference, as an admission against interest by Sidney Nolan. Cynthia apparently advised the Moderna Museet to note "Royal Hotel" 1948 as belonging to her (see document 3.9). Two letters of Cynthia to Mr Von Schantz of Moderna Museum dated 27 November 1975 and 14 December 1975 respectively advise Mr Von Schantz that certain paintings are "mine" or are "belonging to me". Further, I consider that while there is evidence that Sidney Nolan was directly involved in the production of some catalogues, I cannot be confident that he had such involvement in the preparation of this catalogue. I cannot assume that Sidney Nolan understood Swedish or the significance of the attribution "tillhor" ("belongs to"). The catalogue lists "No 20 Royal Hotel 1948 122 91 Tillhor Mrs C Nolan". The absence of evidence that Sidney Nolan failed to prevent its publication is not tantamount to establishing his understanding and approval of the attribution. [433] As the statement is admissible as a business record, it is necessary to determine what weight should be attributed to it. For the reasons stated above, it cannot be assumed that Sidney Nolan supplied the attribution or agreed with it, simply because there is no evidence of protest. However, on the most favourable construction for the plaintiff, if Sidney Nolan supplied and acquiesced in the attribution (which I do not find) it would still be necessary to establish that he delivered the painting to Cynthia, in order to establish a perfect and complete gift. The issue of delivery is considered below. Document 3.3 -- Letter from Sidney Nolan to Mr Phillip Von Schantz dated 12 October 1975 [434] The letter from Sidney Nolan to Mr Von Schantz dated 16 October 1975 stated that "We look forward very much to your visiting London after 10 November when we can arrange everything to do with the catalogue ...". The handwriting was identified by Ms Jinx Nolan as that of Sidney Nolan. [435] I consider that any relevant statement is admissible pursuant to s 51(a) and (b) of the Act. However, that statement is not that "Royal Hotel" 1948 belongs to Cynthia, but simply that Sidney plans that "we" (in context, Cynthia and/or himself) intend "to arrange everything to do with the catalogue etc". There is no evidence that the proposed meeting occurred or that Sidney Nolan himself 10 VR 626 at 689

Page 60 provided the attribution of ownership. The statement establishes that Sidney Nolan intended to be involved in preparation of a catalogue which ultimately made such an attribution. In my opinion, exercising the required scrutiny and caution, it goes no further than that. If, however, on a proper construction, the attributions were made and approved of by Sidney Nolan, it would be necessary to establish the further element of delivery in order to prove a valid gift. Document 3.4 -- Letter from Phillip Von Schantz to Lord Clark dated 20 November 1975 [436] The letter from Phillip Von Schantz (director of the Moderna Museet) to Lord Clark dated 20 November 1975, refers to the proposed retrospective Nolan exhibition and the catalogue. It asks consent to translate Lord Clark's introduction to Colin MacInnes' book on Nolan, "an idea that Mr Nolan himself agrees on". I consider that any relevant statement would be admissible as a business record of the Moderna Museet, pursuant to s 55(1)(b) of the Act. The plaintiff contends that the statement supports the fact of ownership by Cynthia, by demonstrating the participation of Sidney Nolan in a catalogue which attributes ownership to her. While I consider that the statement is admissible, I attribute little weight to it. The fact that a third party asserts that Sidney Nolan agreed to the use of a translated introduction for the catalogue has no substantive connection with any attribution of ownership in that catalogue. Document 3.5 -- Letter from Phillip Von Schantz to Cynthia Nolan dated 10 December 1975 [437] The letter states that "the two paintings 'Robbed' and 'Soldier' will be mentioned in the catalogue as belonging to you". It also mentions arrangements for the exhibition and hotel bookings. [438] In my opinion, any relevant statement would be admissible, as being or forming part of a record relating to the business of the Moderna Museet pursuant to s 55(1)(b) of the Act. [439] However, in determining weight, I do not accept the plaintiff's submission that the letter "confirms that Cynthia Nolan was lending her own works for the exhibition in accordance with the usual practice of Sidney and Cynthia Nolan". In my opinion, that begs the question. The statement establishes no more than that Cynthia instructed the Moderna Museet to make the attribution. There is no evidence that Sidney Nolan participated in or approved that instruction. Document 3.6 -- Sidney Nolan's pocket diary for 14 January 1876 [440] The diary extract of Sidney Nolan's pocket diary for 14 January 1976 records for 14 January 1976 "Go Stockholm". The handwriting was identified by the plaintiff as that of Sidney Nolan. [441] I consider that the only relevant statement in the extract is admissible pursuant to s 55(1)(a) of the Act, as being a statement made by a person, Sidney Nolan, who may be inferred to have had personal knowledge of the matters dealt with therein at the time of making it, and who, although not called as a witness, is now dead. [442] Section 55(1)(b) of the Act would constitute an alternative basis for admissibility as, although some purely personal matters are included, professional commitments are also recorded. [443] However, while I consider that "Go Stockholm" is admissible because it tends to establish the fact of Sidney Nolan's attendance at the date of exhibition and hence his participation in, or knowledge of the contents of the relevant catalogue, 10 VR 626 at 690 that tendency is very slight. Even if it could be inferred from this that Sidney Nolan attended the exhibition, it throws no light on his knowledge and approval of the attribution of "Royal Hotel" 1948 as "tillhor Mrs Cynthia Nolan". Document 3.7 -- Photograph (signed "S" on back) of Cynthia Nolan in Stockholm standing in front of poster advertising the Moderna Museet exhibition in 1976 [444] This is a photograph identified by the plaintiff as being of Cynthia Nolan, taken in front of a poster of

Page 61 the Moderna Museet exhibition in Stockholm in 1976. There is an "S" on the back identified by Ms Jinx Nolan as being written by Sidney Nolan. [445] "Statement" is widely defined in s 3 of the Act to include any representation of fact, whether made in words or otherwise. If the statement to the effect that Sidney Nolan attended the exhibition could be elicited from the photograph, it would be admissible, but I would place no weight on it, for the reasons outlined in relation to document 3.6. In any event, I do not consider that the plaintiff has established that Sidney Nolan took the photograph, although he apparently wrote the initial "S" on the back. Document 3.8 -- Letter from Cynthia Nolan to Phillip Von Schantz dated 27 November 1975 [446] The letter from Cynthia Nolan to Phillip Von Schantz dated 27 November 1975 includes the statement that "going through the paintings you have chosen I find 2 more belonging to me 'Robbed', ripolin on board 36 48 and 'Soldier', pva on board 38 36". [447] Although I consider that any relevant statement is admissible pursuant to s 55(1)(a) of the Act, and as a business record of the Moderna Museet pursuant to s 55(1)(b), I would place little or no weight on it in establishing Cynthia's ownership of "Royal Hotel" 1948, for the reasons set out in relation to document 3.5. Document 3.9 -- Letter from Cynthia Nolan to Phillip Von Schantz dated 14 December 1975 [448] The letter from Cynthia Nolan to Phillip Von Schantz dated 14 December 1975 includes the statement "I notice Sidney has included one more of mine, the Chinese Cock". [449] In my opinion, any relevant statement would be admissible pursuant to s 55(1)(a) and (b) of the Act, on the grounds set out in relation to document 3.8. [450] For reasons set out in relation to document 3.8, I would attribute no weight to the statement in establishing Cynthia's ownership of "Royal Hotel" 1948. On the contrary, the statement tends to cast doubt on Cynthia's ownership, in that it clearly indicates that Sidney Nolan continued unilaterally and independently to deal with, or make available, a painting over which Cynthia had made an assertion of ownership. Document 3.10 -- Letter from Phillip Von Schantz to Cynthia Nolan dated 27 November 1975 [451] I consider that any relevant statement would be admissible pursuant to s 55(1)(a) of the Act as the maker, Mr Von Schantz, may be inferred to have had at the time of making the statement, personal knowledge of the matters dealt with by the statement and although not called as a witness, is dead. 10 VR 626 at 691 [452] Further, a relevant statement would be admissible pursuant to s 55(1)(b) of the Act as being or forming part of, a record relating to the business of Moderna Museet made from information supplied by Mr Von Schantz, who may reasonably be inferred to have had personal knowledge of the matters dealt with, and who although not called as a witness, is now dead. [453] In the letter Mr Von Schantz informs Cynthia that work with the catalogue is "well under way" and "we are very happy that the paintings "Royal Hotel" and "Convict Crossing Creek" will be included and we will certainly mention you in the catalogue as the owner of them". [454] Although the statement is admissible, I do not accept the plaintiff's submission that it "confirms that Cynthia Nolan was lending her own works for the exhibition". Rather, the letter suggests that Cynthia had asserted her ownership of "Royal Hotel" 1948 to Mr Von Schantz in a communication to which Sidney Nolan may not have been party and had elicited an acknowledgment of her asserted ownership in the catalogue. Conclusion on donative intention -- "Royal Hotel" 1948 [455] Having exercised the required scrutiny and caution in assessing the documents and statements, I am

Page 62 unable to conclude that they evidence words of gift or an unequivocal acknowledgment of Cynthia's ownership of "Royal Hotel" 1948 by Sidney Nolan. The letter from Richard Cobden to Cynthia Nolan dated 11 June 1976/David Jones file [456] Although the letter from Richard Cobden constitutes part of a business record of the National Gallery or Cynthia Nolan, it is a formal acknowledgment of the letter from Cynthia Nolan and Elwyn Lynn, and adds nothing to the content of those letters. I therefore uphold the defendants' objection to admissibility. The statement or statements sought to be admitted from the documents in the David Jones file, and their relevance, are not identified. I therefore uphold the objection to the admission of the file. L. Delivery [457] As I have found that the plaintiff has not established words of gift or the requisite donative intention in relation to any of the three paintings, it is unnecessary to consider the further requirement of delivery. However, for the sake of completeness I do so. [458] Delivery in the present context does not function merely as evidence of donative intention. It is the legal act essential to complete the gift. It transfers both possession and (by perfecting the gift) ownership of the chattel to the donee. Accordingly, a valid delivery marks the termination of the donor's dominion. A continuation of control or power in the donor is inconsistent with a valid delivery and hence inconsistent with a perfect gift. [459] This was well expressed in Young v Cockman,88 a decision of the Maryland Court of Appeals, in which Delaplaine J, delivering the judgment of the court, observed:
To make an effectual delivery the donor must not only part with possession of the property, but must relinquish all present and future dominion and control over it beyond 10 VR 626 at 692 any power on his part to reclaim it. It is obvious that a transfer is not a transfer of possession unless the transferor intends that it shall take effect immediately. If he retains the same control over the property that he had before the transfer was made, there remains a locus poenitentiae, in which he may revoke what he has done, and consequently there is no delivery.

[460] It is well established that delivery may be actual (by way of manual or physical transfer of the goods),89 or constructive.90 Constructive delivery may take various forms. Where the nature or bulk of the goods renders manual delivery impossible or impractical, acts falling short of manual delivery have been held sufficient to signal a change in possession.91 [461] A further form of constructive delivery occurs when the donee is already in possession or, according to some authorities, when the donee already has custody, of the chattels.92 Delivery can also occur after the manifestation of intention, or (in the usual case) contemporaneously with it.93 [462] As the gift can be retracted at any time prior to delivery, where delivery takes place subsequently, it would be necessary to establish that the previously expressed donative intention was still on foot when delivery occurred. [463] Alternatively, it would be necessary to establish that the chattels were already in the possession (or at least the custody -- see discussion below) of the purported donee at the time when the words of gift were expressed or donative intention was otherwise made manifest. [464] Where possession of the chattels by the intended donee precedes the words of gift, the gift may be perfected without the necessity for the donor to retake possession of the chattels in question in order to effect a valid delivery. In Re Stoneham, the chattels in question were already situated in a house occupied by the donee when the donor spoke the words of gift. Laurence J, having reviewed Cochrane v Moore,94 held that where the chattel the subject matter of a parol gift is already in the possession of the donee at the time when the gift is made, a further delivery or a change of possession is unnecessary. Rather: 95

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[I]n order to constitute a perfect gift by word of mouth of chattels capable of delivery the donee must have had the chattels delivered into his possession by the donor or by someone on his behalf. In principle I can see no distinction between a delivery antecedent to the gift and a delivery concurrent with or subsequent to the gift. Nor can I see any reason in principle why the rule should not apply to a case where chattels have been delivered to the donee before the gift as bailee or in any other capacity, so long as they are actually in his possession at the time of the gift to the knowledge of the donor.

[465] Laurence J reaffirmed the requirement of a delivery and, in the case of antecedent possession by the intended donee, appeared to assume that a delivery to the donee whether "as bailee or in any other capacity" had already occurred. 10 VR 626 at 693 M. Delivery in common establishments [466] The question of how delivery of household goods or chattels is to be validly effected between spouses or other cohabitants in a common establishment poses special difficulties. The determination of whether an establishment is "common" is a question of fact.96 There is no reason why the concept should be restricted to particular categories of social or familial relationships. [467] The National Trustees Executors and Agency Co Ltd v O'Hea97 is an early Victorian decision dealing with a purported gift from employer to employee within a shared establishment. The deceased, when close to death, stated clear words of gift of his coach and horses to his servant, the coachman. There was no doubt that the deceased intended to make a gift. However, no change in possession occurred. The coach and horses continued to be maintained at the deceased's premises. [468] A'Beckett J found that the requirement of delivery was not satisfied. Although delivery could be antecedent, in the present case, although the servant had actual possession, it was not possession as a bailee, but legally, was the possession of the donor, his master.98 Further, nothing was done which would indicate a change in possession:
It could not be said that the [donor] had at any time made delivery to his coachman of any of the chattels which were in his custody at the time when they were given to him, or that the custody differed from the ordinary custody by a servant of his master's goods. When things are in such custody I hold that there can be no effectual gift of them by the master merely telling the servant that he may keep them as his own.

[469] In requiring delivery, A'Beckett J stated,99 "It would be dangerous to relax a rule which requires some visible act as an essential, when the only other essential is that certain words should be spoken". [470] The question of delivery between spouses in a common establishment was considered in In re Cole (a bankrupt); Ex parte The Trustee of the Property of the Bankrupt.100 In that case, a husband purchased a house as a family home, equipped it with valuable furniture and introduced his wife to the house, escorting her through the house indicating items and stating, "Look, it's all yours". The spouses continued to reside together in the house. [471] On the husband's subsequent bankruptcy, the trustee in bankruptcy claimed entitlement to the house contents. The wife contested that claim, on the ground that she was the beneficiary of a valid gift. [472] Cross J, at first instance, held that there was a valid gift, observing, "I do not see what more Mr Cole could have done to put Mrs Cole into possession of the gift which he thought he was making". [473] On appeal, the Court of Appeal held that there was no valid gift. Harman LJ observed:101
It is, I think, trite law that a gift of chattels is not complete unless accompanied by something which constitutes an act of delivery or a change of possession. The English law of the transfer of property, dominated as it always has been by the doctrine of

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10 VR 626 at 694 consideration, has always been chary of the recognition of gifts ... in the absence of consideration, delivery is still necessary except in the cases of a gift by will or by deed, which latter itself imports both consideration and delivery.

[474] Reviewing applicable authorities, Harman LJ, although recognising that delivery could be constructive and could accompany, precede or antecede the gift, held that delivery was necessary in every case of a parol gift inter vivos. [475] Relying on Bashall v Bashall,102 Harman LJ emphasised that the requirement of delivery was as essential in a case of husband and wife as in a case of two strangers. He considered that in such a case, although small items, such as jewellery could readily be delivered, in the case of voluminous or unwieldy items, the requirement of delivery (which must be more than words or the mere introduction of a wife to a matrimonial home in which the chattels were situated), could be difficult. He considered that the wife's usage of, or access to the chattels, would not suffice. [476] Harman LJ held that there was no change in possession in Re Cole. He observed that "[i]t is true that it may be doubtful who is in possession of the furniture and that you must look to the title".103 [477] Pearson LJ observed:104
[I]t has been established that oral words of gift, or even written words of gift not embodied in a deed or will, are not sufficient to make an effective gift unless there has been or is delivery of possession to the donee. The basic idea is that there must be giving and taking, and if the donor retains possession, has not yet given and the donee has not yet taken.

[478] Pearson LJ also took the view that in the case of a husband and wife living together or other persons having a common establishment, the possession, as it would otherwise be doubtful, is attached by law to the title.105 [479] Pearson LJ concurred with Harman LJ and Pennycuick J in holding that applicable authority required delivery in the case of husband and wife within a common establishment, endorsing106 the statement in Bashall v Bashall107 that in the case of delivery between spouses, "if the facts proved were equally consistent with the idea that he intended to deliver the thing to the wife so as to be her property, and with the idea that he intended to keep it as his own property, then the wife failed to make out her case". [480] As such, Pearson LJ observed108 that delivery must be an act which in itself shows an intention of the donor to transfer the chattel to the donee:
If the act in itself is equivocal -- consistent equally with an intention of the husband to transfer the chattels to his wife or with an intention on his part to retain possession but give to her the use and enjoyment of the chattels as the wife -- the act does not constitute delivery.

10 VR 626 at 695 [481] His Lordship noted that in the case before him, there was no pre-existing possession in the donee prior to any words of gift and the acts relied on, being equivocal in the relevant sense, did not satisfy the requirement of delivery.109 [482] If Lord Pearson's approach be correct, although delivery is not merely evidence of intention to make a gift, but rather an integral component of the gift transaction, it is nevertheless necessary that the act of delivery unequivocally evidence the donor's intention to transfer, and not retain, possession of the chattel in question. [483] Interestingly, Pennycuick J expressed himself as constrained by authority rather than persuaded as a matter of principle to hold that an act of delivery was required when one spouse spoke words of gift to the other spouse, who was already sharing the physical enjoyment of the relevant chattel.110 His Honour's

Page 65 approach appears to foreshadow that of Santow J in Horsley v Phillips Fine Arts Auctioneers Pty Ltd, discussed below. [484] The peculiar problems posed by spouses or other cohabitants in a common establishment have received recent consideration in two Australian cases, which evince differing and perhaps irreconcilable approaches. [485] In Horsley v Phillips Fine Arts Auctioneers Pty Ltd, Santow J questioned the authority of Re Cole. His Honour held that where chattels are situated in a residence of which the intended donee is occupier or titleholder, and there is no shared control of the chattels, the chattels may be regarded as being in the preexisting possession, or at least the custody, of the donee, and subsequent words of gift may suffice to perfect the gift, without any requirement for the donor first to retake possession or to execute a deed. His Honour's observations also evinced an expansive approach to delivery, suggesting that prior custody by a donee in a common establishment may suffice. [486] In Horsley v Phillips Fine Arts Auctioneers Pty Ltd a credit corporation which seized certain valuable household chattels as assignee of a bill of sale resisted a cross-claim for conversion on the grounds that the cross-claimant had, inter alia, divested himself of that interest by joining with his brother in an effective gift of their half interests in the chattels to their mother, prior to the granting of the bill of sale from which the credit corporation purportedly derived title. [487] The brothers (who held joint title to the chattels in question) occupied a very large mansion property with their parents. The cross-claimant occupied a separate cottage and his brother, although residing within the main house with the parents, occupied a separate suite. Santow J held that the arrangement did not constitute a "common establishment". [488] The relevant furniture was kept in those parts of the main house which were under the control of the parents, so that if the brothers used the rooms they did not do so "as co-possessors, with their parents, but by leave of their parents; though no doubt their access was in practice untrammelled". 111 Santow J accepted the cross-claimant's evidence that the brothers "did unequivocally state to their mother that they were gifting the furniture to her and had the celebratory drink".112 10 VR 626 at 696 [489] His Honour considered that the cross-claimant probably walked around the various items of furniture, but was unable to determine whether he was accompanied by his mother or brother, or, if his mother accompanied him, whether he placed his hand on the items, although he did not hand anything to his mother. [490] Santow J concluded that a valid gift of the chattels had been effected. In that context, he relied upon the principle that further delivery is unnecessary if the intended donee "already had possession, or, at the least, custody of the chattels at the time of the words of gift".113 [491] His Honour discussed the distinction between legal possession (animus possidendi and a degree of physical control sufficient to exclude strangers from interfering) and mere custody (de facto possession or mere physical control). He referred to Flinn v White114 in which words of gift by a father to his daughter in relation to a piano, which remained throughout situated in the family home of which the father was occupier, were held to be ineffective, for want of pre-existing possession or custody in the donee, or a further act of delivery. [492] Santow J questioned whether, although the daughter had "no more than a licence, revocable by the father at will" to use the piano, she did not in fact have custody. In his view, "[s]tatus as a licensee, as such, need not be fatal; a licensee can have the degree of physical control required for custody".115 His Honour found, however, that the decision could, in any event, be justified by reference to onus. The daughter had not dispelled the implication of her having only limited access, a right to use the piano at the father's pleasure, which was shared with at least one other family member. More directly relevant were Hislop v Hislop116 and Re Cole which involved a purported gift between husband and wife residing together in the matrimonial home. Santow J considered the results in Hislop v Hislop and Re Cole were explicable because joint de facto control of the furniture (based on being permitted to use and enjoy it), did not suffice to

Page 66 establish pre-existing possession. [493] In Horsley v Phillips Fine Arts Auctioneers Pty Ltd, Santow J held that the intended donee, the mother, had (jointly with her husband) physical control and therefore custody of the chattels. On one view, she also had exclusive possession of the house and therefore of the rooms in which they were situated. The fact that the mother had such custody or possession jointly with her husband was, in his view, irrelevant. [494] On Santow J's findings, there was no joint custody or possession between the putative donors and donee. Although not deciding the question, Santow J was inclined to think that shared control between a putative donor and donee should not be fatal. He observed:117
This is especially where there is no suggestion of shared control between putative donor and donee. I do not need to decide whether the feature, absent here, should be fatal to an effectual gift, though I am inclined to think it should not be fatal.

10 VR 626 at 697 [495] In Horsley v Phillips Fine Arts Auctioneers Pty Ltd, Santow J questioned the authority of Re Cole and Hislop v Hislop because the cases failed to deal with custody as a separate basis from possession. His Honour considered118 that:
They appear to have proceeded on an implicit and I suggest, questionable, assumption. That is, that where goods are in the shared use of the putative donor and donee, but where the putative donor has the superior right to those goods through ownership of the home in which kept [sic], that necessarily precludes a finding of custody on the part of the claimant donee.

[496] Santow J's observation may suggest that the purported donors in Re Cole and Hislop v Hislop had de facto mixed possession, but a superior right to the goods, not because they had legal ownership of the goods, but because they had legal title to the house in which they were situated. However, the reference to "possession following title" in those cases related to the title to the chattels, not title to the residence in which they were situated. [497] Horsley v Phillips Fine Arts Auctioneers Pty Ltd did not concern a common establishment or a situation of shared control and Santow J's observations were therefore obiter dicta. [498] In Tudberry v Sutton,119 a case decided after Horsley v Phillips Fine Arts Auctioneers Pty Ltd, Judge McGill SC strongly reaffirmed the primacy of the requirement for an identifiable act of delivery. He considered that recognised exceptions based on prior possession or custody should not be extended. In Tudberry v Sutton, the deceased's sister and her family resided in his house, visiting from interstate, while he was gravely ill in hospital. The sister gave evidence that her brother expressed an intention to make an immediate gift of a memento to her children (his niece and nephew). The sister selected and named two paintings in her brother's house, informed him, and he appeared to nod assent. The sister then removed the paintings from the brother's residence. The brother subsequently died. [499] Judge McGill SC held that there was no valid gift. He adverted120 to the necessity for the donor to give, rather than the donee to take, possession. He questioned the status of Thomas v The Times Book Co, which he identified as the only decision in which the taking of possession by the donee had been upheld. He considered that if it correctly decided that an effective delivery had occurred, such delivery was effective not because the donee took possession with consent, but because, on proper analysis, the custodian of the place where Thomas had mislaid the manuscript gave it to the donee in the capacity as the bailee of the donor. Nevertheless, Judge McGill SC concluded that, taken at face value, the decision in Thomas v The Times Book Co is "simply wrong and is an example of a hard case making bad law".121 [500] Judge McGill SC considered that Santow J's unqualified extension of prior possession to prior custody in any capacity at all in Horsley v Phillips Fine Arts Auctioneers Pty Ltd failed to accord with the tenor of applicable authority and with the underlying governing principle that delivery is the formal step

Page 67 which effects the gift. 10 VR 626 at 698 [501] He considered that the only case where mere custody, as distinct from possession, is legitimately within the exception would be where the donee is in the degree of physical control that would otherwise require the donor first "to retake" the chattels.122 That would have been the case in both Re Stoneham and Horsley v Phillips Fine Arts Auctioneers Pty Ltd, as the donees were in exclusive occupation of the residences in which the chattels were situated. It would not be the case where the donor and donee occupied a common establishment and where there was only "such custody as is afforded by actual use from time to time".123 In such cases, mere words of gift unaccompanied by any further act of delivery would not suffice. Some manual or constructive act of delivery would be necessary "unless the donee already has such a degree of possession that there would have to be redelivery before there could be delivery". 124 On that basis, Re Cole was correctly decided. [502] In reiterating a preference for continued observance of the strict requirement of delivery, and confining the exception of pre-existing possession to strict limits, Judge McGill SC noted: 125
I suspect that part of the reason for the survival of the rule in its strict form has been a desire to prevent a deathbed gift inter vivos or donatio mortis causa from evading statutes which require wills to be made in a particular form, coupled with a general suspicion as to the genuineness of claims of oral gifts from persons who were either unable to dispute them (because they were dead) or happy to connive at them (because they were bankrupt) ... There is, however, in my opinion, no justification for relaxing these rules.

[503] Judge McGill SC held that the temporary residence of the deceased's sister as a guest in his house did not confer custody of the premises or the chattels therein, although the owner was temporarily absent. The exception did not apply, because re-delivery to the donor was not necessary in order to complete the gift.126 [504] In my opinion, there is force in Judge McGill SC's insistence on maintaining delivery as a preeminent independent requirement. In the absence of an unambiguous act, the enforcement of voluntary transfers against donors and their successors in title could produce unjust outcomes. That approach does, on occasion, result in the failure of some purported gifts which were genuinely intended. However, greater harm may result from undue relaxation of the delivery requirement, particularly in the context of common establishments. A proliferation of claims between cohabitants, trustees in bankruptcy and executors, together with increased uncertainty in the determination of such claims, may result. In my opinion, the principles expressed in The National Trustees Executors and Agency Co Ltd v O'Hea and Re Cole should be maintained. [505] In the present case if, contrary to my findings, the relevant documents expressed Sidney Nolan's clear donative intention or acknowledgment of Cynthia's ownership, the plaintiff must also establish a delivery of the paintings. [506] There is no direct evidence of any act of delivery, whether manual or constructive, by Sidney Nolan to Cynthia. 10 VR 626 at 699 [507] In the present case, it is undisputed that Sidney Nolan and Cynthia occupied a common matrimonial home during the course of their marriage. [508] The question arises whether there is any basis on which the plaintiff can discharge the onus of establishing delivery. [509] As set out in [43]-[46] above, there is no evidence that the paintings in dispute were situated in the Nolans' matrimonial home during the course of their marriage.127 Other than for the period from 1974 to mid-1976 (in relation to "Hare in Trap" 1946 and "Italian Crucifix" 1955) and the periods of the relevant exhibitions, there is no evidence as to where the paintings were situated. [510] Further, other than for the period from 1974 to mid-1976 there is no evidence of Cynthia's level of

Page 68 access to, or power, rights of user and control over, any of the paintings in dispute. [511] Given such lacunae, the liberal approach of Santow J in Horsley v Phillips Fine Arts Auctioneers Pty Ltd to pre-existing custody in a common establishment, even if extended, cannot assist the plaintiff to establish delivery in the present case. [512] There is no evidence that Cynthia was, at any stage, in possession of "Royal Hotel" 1948. There is evidence that Cynthia caused 26 paintings including "Hare in Trap" 1946 and "Italian Crucifix" 1955 to be despatched to Australia in 1974 and that she exercised control and dominion over "Hare in Trap" 1946 and (probably) "Italian Crucifix" 1955 until at least June 1976. [513] Cynthia at that time took possession of the paintings in question and assumed the rights of an owner in relation to them. There is no evidence that Sidney Nolan delivered possession to Cynthia. On the contrary, he did not know of, or consent to, her actions. If, contrary to the views expressed in Tudberry v Sutton, a valid delivery may be established by the donee's taking possession with the knowledge and consent of the donor, that did not occur in the present case. Unauthorised appropriation by the purported donee could not constitute a valid delivery on any view. In the circumstances, the plaintiff has failed to establish the essential element of delivery. N. Conclusion [514] In this proceeding, the cases for the plaintiff and the defendants have been clearly presented and wellargued. For the reasons set out above, in my opinion, the plaintiff has failed to establish the requisite elements of donative intention and delivery in relation to the three paintings. I conclude that a valid gift of the paintings to Cynthia, on which the plaintiff's claim to relief in this proceeding depends, is not made out. [515] Given my finding that a valid gift of the three paintings is not established, it is unnecessary to consider the defences and the arguments in reply. In order to avoid undue delay, I shall not consider them comprehensively or in any detail. I observe, however, that had a gift of the paintings to Cynthia been established, in my opinion a defence based on the Limitation of Actions Act 1958, at least, would have been made out. 10 VR 626 at 700 [516] I consider that Sidney Nolan's conduct in assuming the rights of an owner in relation to the paintings from a date in late 1976 would have constituted conversion128 and the right of action of Cynthia's trustees would have been barred after the expiration of a six year period pursuant to the Limitation of Actions Act. I do not accept the plaintiff's submission that, in such circumstances, Sidney Nolan would assume the status of a constructive trustee to whose conduct no limitation applies by virtue of s 21 of the Limitation of Actions Act. It is recognised that a donor who has completed all elements of a gift save for the transfer of legal title may be constituted a constructive trustee for the donee while the donor retains legal title. 129 However, the present case concerns an alleged gift of chattels. If a gift of chattels were complete and valid, the donor would necessarily be divested of legal title to the chattels. There is no legitimate role for a constructive trust in such circumstances and no precedent for it has been identified. [517] As the additional constructive trusts pleaded by the plaintiff are all predicated upon the primary constructive trust allegedly imposed on Sidney Nolan, I shall not consider them further. [518] In my opinion, the plaintiff's claim must fail and the proceeding should be dismissed. Judgment for the defendants. Solicitors for the plaintiff: Simon Parsons & Co. Solicitor for the defendants: Nathan Kuperholz. [On 10 June 2004, the Court of Appeal (Ormiston, Eames and Chernov JJA) decided that her Honour had

Page 69 erred in failing to assess the evidence as a whole for the purpose of determining if Nolan had made a gift of the three disputed paintings to his then wife, but dismissed the plaintiff's appeal on the basis that the action was statute-barred and should have been dismissed for that reason: [2004] VSCA 109: Ed VR.]

1 Young v Murphy [1996] 1 VR 279. 2 MCC Proceeds Inc v Lehman Brothers International (Europe) [1998] 4 All ER 675. 3 (1998) 44 NSWLR 432. 4 At 436. 5 (1996) 67 FCR 560. 6 At 437-8. 7 [1971] VR 612. 8 (1923) 33 CLR 538 at 546. 9 Per Sir Thomas Plummer MR in Marquis Cholmondeley v Lord Clinton (1820) 2 Jac & W 1 at 140 ; 37 ER 527 at 577. 10 Calverley v Green (1984) 155 CLR 242. 11 Per Stuart VC in Howard v Fingall (1853) 22 LTOS 12. 12 Tyler and Palmer (eds), Crossley Vaines on Personal Property, 5th ed, (1973), p 301; Fisher, Commercial and Personal Property Law, (1997), p 451. 13 In re Stoneham; Stoneham v Stoneham [1919] 1 Ch 149 at 153. 14 [1964] Ch 175. 15 (1995) 7 BPR 14,360 at 14,367. 16 (1990) 169 CLR 540 at 558. 17 Richards v Delbridge (1874) LR 18 Eq 11 at 15 per Jessel MR. 18 (1885) 15 QBD 447. 19 (1904) 29 VLR 814. 20 (1885) 31 Ch D 1 at 9. 21 [1966] 1 WLR 911. 22 At 916. 23 (1915) 19 CLR 544. 24 At 548-9.

Page 70

25 [2002] VSC 320 at [43]. 26 [2000] VSC 551 at [36]. 27 LR 19 Ind App 9. 28 At 9-10. 29 At 549. 30 Ibid. 31 Plunkett v Bull; The Perpetual Executors and Trustees Association of Australia Ltd v Wright (1917) 23 CLR 185; Eyota Pty Ltd v Hanave Pty Ltd (1994) 12 ACSR 785 ; 12 ACLC 669. 32 (1959) 101 CLR 298. 33 678 F 2d 1150 (1982). 34 Per Cussen J in R v Parker [1912] VLR 152 at 160. 35 (2002) 212 CLR 411 at 443, [77]. 36 Ibid. 37 [1979] 2 NSWLR 193 at 198. 38 [1967] VR 566. 39 [1999] VSC 326 (23 August 1999). 40 [1970] WAR 170 at 175. 41 See also Lenehan v Queensland Trustees Ltd [1965] Qd R 559. 42 See Re Marra Developments Ltd and the Companies Actat 198. 43 (1980) 2 NSWLR 542 at 548-9. 44 At [24]. 45 At [19]. 46 Morley v National Insurance Coat 567. See also R v Ernst [1984] VR 593 at 596; Wielgus v Wielgus [1959] VR 193. 47 [1954] VLR 514 at 520. 48 (1993) 31 NSWLR 412 at 435. 49 Cross on Evidence, Australian edition, paras 35085-35090. 50 [1957] VR 221 at 223.

Page 71
51 At 523. 52 [2001] VSC 484 (4 December 2001). 53 At [16]. 54 Cross on Evidence, Australian edition, para 35090. 55 (1991) 22 NSWLR 717 at 726-7. 56 At 727. 57 See for example, Second Reading Speech, Evidence (Documents) Bill, 31 August 1971. 58 [1951] 2 KB 937. 59 At 946. 60 At 942. 61 (1995) 56 FCR 481 at 484-5. 62 (2002) 4 VR 332. 63 At 340, [17]. 64 (1998) 81 FCR 526 at 559. 65 At 341, [19]. 66 At 341, [20]. 67 At 333, [3]. 68 [1999] VSC 326 at [23]. 69 [1982] 1 NSWLR 409. 70 At 412. 71 Ibid. 72 Ibid. 73 (1863) 10 HL Cas 593 at 614 ; 11 ER 1155 at 1164. 74 Australian edition, para 1265. 75 At HL Cas 614; ER 1164. 76 Ibid. 77 Ibid.

Page 72
78 Ibid. 79 [1899] 2 Ch 121. 80 At 126. 81 At 127. 82 Cross on Evidence, Australian edition, para 33815. 83 At 125-6. 84 At 126. 85 (1878) 3 App Cas 641. 86 At 653. 87 At 669. 88 149 ALR 1006 (1943) at 1010. 89 Re Everett; Executor Trustees & Agency Co of South Australia Ltd v Everett [1917] SASR 52 at 58; Olsson v Dyson (1969) 120 CLR 365 at 385. 90 In re Stoneham; Stoneham v Stoneham [1919] 1 Ch 149 at 156. 91 Winter v Winter (1861) 4 LT 639; Rawlinson v Mort (1905) 93 LT 555. 92 Horsley v Phillips Fine Art Auctioneers Pty Ltd (1995) 7 BPR 14,360 at 14,367. 93 Re Stoneham at 153-4. 94 (1890) 25 QBD 57. 95 At 153-4. 96 Horsley v Phillips Fine Art Auctioneers Pty Ltdat 14,370. 97 (1904) 29 VLR 814. 98 At 825-6. 99 Ibid. 100 [1964] Ch 175. 101 At 185. 102 (1894) 11 TLR 152. 103 At 190. 104 At 191.

Page 73

105 At 192. 106 Ibid. 107 At 153. 108 At 192. 109 Ibid. 110 At 193. 111 At 14,365. 112 Ibid. 113 At 14,368. 114 [1950] SASR 195. 115 At 14,379. 116 [1950] WN Eng 125. 117 At 14,373. 118 At 14,370. 119 (1998) 20 Qld Lawyer Reps 13. 120 At 15. 121 Ibid. It is possible to view Thomas v The Times Book Co as an example of constructive delivery by the donor, whose provision of information on the whereabouts of the mislaid manuscript conferred access on the donee to the extent possible in the circumstances. 122 At 18. 123 At 19. 124 Ibid. 125 At 17. 126 At 19. 127 Mr Danziger-Miles' evidence was to the effect that "Italian Crucifix" 1955 was in the house at some stage, but no date was given. 128 Penfolds Wines Pty Ltd v Elliot (1946) 74 CLR 204 at 229-30 per Dixon J. 129 In re Rose; Rose v Inland Revenue Commissioners [1952] Ch 499.

Page 74 K W ESSER BARRISTER-AT-LAW

Page 75

Page 76 3 of 10 DOCUMENTS: CaseBase Cases

Penfold v Perpetual Trustee Co Ltd

[2002] NSWSC 648; BC200204116 Court: NSWSC Judges: Windeyer J Judgment Date: 25/7/2002

Catchwords & Digest

Succession -- Family provision -- Widow -- Divorced for 30 years prior to death Parties married in 1957. Parties divorced in 1968. Deceased died in 1999. Estate approximately $4m. Wife brought up four children of marriage. No ongoing relationship of any cordial kind between applicant and deceased. Family Court litigation spanning twelve years including successful High Court proceedings by wife. Deceased paid nothing to plaintiff unless required to by court order. Plaintiff's position after divorce far more difficult than that of former husband. Plaintiff worked from divorce until retirement in 1997. Defendant retired in 1976. Inherited interests in stationary company. Plaintiff's requests for provision not extravagant. Suffering from mild depression due to breakdown of relationship with children due to current litigation. Children have no financial difficulties. Whether right-minded members of community would consider plaintiff properly falls among persons who were natural objects of bounty of testator. Succession -- Wills and codicils -- Public policy -- Provision contrary to public policy Application by former wife of deceased that some words be struck out of will as contrary to public policy. Will provided that entitlements of children of former marriage under will unable to vest until death of applicant. Whether words had tendency to cause children to hate applicant and wish her dead. Whether words calculated to cause family disharmony between plaintiff and children. Held, dismissing the application: (i) There is no power to strike the words out of the will. It has already been admitted to probate. There is no known authority for recalling probate and reissuing it with the offending words excluded. (ii) Although the words may cause hurt they are not defamatory or scandalous. (iii) Improper feelings caused by testamentary disposition are insufficient to strike down that provision. (iv) The words are no more likely to cause the defendants to hate the applicant than any remainderman under a will is caused to hate a life tenant. (v) The requirements of (NSW) Family Provision Act 1982 s 9(1) for provision for the applicant from the estate of the deceased have not been met. (vi) The relationship between applicant and deceased ended 30 years prior to death; any continuing contact

Page 77 was only as a result of the children and ended when the children became independent. (vii) The will indicated the deceased had strong feelings against the applicant. (viii) The maintenance the deceased paid to the applicant was not intended or expected to continue after death. (ix) Financial difficulties do not of themselves warrant the making of an application. (x) The responsibility of raising children becomes of decreasing significance as time passes. Cases referring to this case Annotations: All CasesSort by: Judgment Date (Latest First) Annotation Case Name Citations [2012] NSWSC 1030; Followed Sammut v Kleemann BC201206897 [2012] NSWSC 739; Considered Marando v Rizzo BC201205067 [2012] NSWSC 276; Followed Curran v Harvey BC201201630 Bowditch v NSW Trustee & [2012] NSWSC 275; Cited Guardian BC201201629 Laidlaw v Kellie; Laidlaw (bht [2011] NSWSC 740; Considered NSW Trustee & Guardian) v BC201105490 Rusiti Glynne v NSW Trustee and [2011] NSWSC 535; Cited Guardian BC201104325 McMahon v Smith; Turner v [2011] NSWSC 487; Cited Smith; Smith v Smith BC201103947 Thompson v Public Trustee of [2010] NSWSC 1137; Cited New South Wales BC201007563 [2010] NSWSC 1113; Considered Fede v Dell'Arte BC201007413 Cases considered by this case Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations [2001] NSWSC 474; Applied Mulcahy v Weldon BC200103104 Not Brown v Faggoter BC9805810 Followed (1997) 69 SASR 557; Cited Burke v Public Trustee BC9706035 Permanent Trustee Co Ltd v (1995) 36 NSWLR 24; Applied Fraser BC9507161 (1988) 13 NSWLR 639; Dijkhuijs (formerly Coney) v Applied (1988) 92 FLR 67; Barclay (1988) 12 Fam LR 367 (1988) 13 NSWLR 241; (1988) 12 Fam LR 386; Applied Churton v Christian [1988] NSWCA 23; BC8803144 Applied Fulop (decd), Re (1987) 8 NSWLR 679 Considered O'Shaughnessy v Mantle (1986) 7 NSWLR 142 Cited Cutts (decd), Re [1969] VR 254 Cited Adams (decd), Re [1967] VR 881

Court NSW SC NSW SC NSW SC NSW SC NSW SC NSW SC NSW SC NSW SC NSW SC

Date 5/9/201 2 5/7/201 2 27/3/20 12 26/3/20 12 22/7/20 11 17/6/20 11 3/6/201 1 14/10/2 010 8/10/20 10

Signal

Court NSWSC NSWCA SASC NSWCA NSWCA

Date 12/6/2001 13/11/1998 11/11/1997 24/2/1995 4/8/1988

Signal

NSWCA NSWSC NSWSC VSC VSC

10/6/1988 27/5/1987 1/12/1986 22/7/1968 29/8/1967

Page 78 Cited Cited Church Property Trustees, Diocese of Newcastle v Ebbeck N, Re Ramsay v Trustees Executors & Agency Co Ltd Ellis, In re; Perpetual Trustee Co Ltd v Ellis Curtis v Curtis Saunders v Vautier (1960) 104 CLR 394; [1961] ALR 339; (1960) 34 ALJR 413; BC6000670 [1950] VLR 139; [1950] ALR 189 [1949] VLR 309; (1948) 77 CLR 321; [1949] ALR 105; (1949) 22 ALJR 600; BC4800390 (1929) 46 WN (NSW) 146 (1825) 3 Add 33; (1825) 162 ER 393 (1841) 4 Beav 115; (1841) 49 ER 282 HCA VSC 6/12/1960 27/2/1950

Applied

HCA

14/12/1948

Cited Cited Cited

NSWSC -

30/8/1929

Legislation considered by this case Legislation Name & Jurisdiction Family Provision Act 1982 (NSW)

Provisions s 7, s 9(1)

Page 79

Page 80 4 of 10 DOCUMENTS: CaseBase Cases

Keogh v Rush
(2001) 10 BPR 18,891; [2001] NSWCA 227; BC200103795 Court: NSWCA Judges: Mason P, Heydon JA and Young CJ Judgment Date: 13/7/2001

Catchwords & Digest

Equity -- Equitable interests -- Life estate -- Increase in value Appeal from decision of master. Life tenant and remainderman. Life tenant discharged mortgage. Remaindermen offering to reimburse capital plus applicable interest. Life tenant surviving 30 years after discharge of mortgage. Property increased in value of 30 year period. Whether life tenant's estate entitled in equity to share of increase. Held: Appeal allowed. Life tenant's estate not entitled to increase. Litigation History Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations [2000] NSWSC 624; Reversed Rush v Keogh BC200006581 Cases considered by this case Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations (1999) 196 CLR 101; (1999) 161 ALR 473; (1999) 73 ALJR 547; Cited Giumelli v Giumelli (1999) 6 Leg Rep 23; (2000) Aust Contract R 90-106; [1999] HCA 10; BC9901018 (1986) 5 NSWLR 610; (1986) ASC 55-500; Considered West v AGC (Advances) Ltd (1986) NSW ConvR 55-306 Considered Muschinski v Dodds (1985) 160 CLR 583; (1985) 62 ALR 429; (1985) 60 ALJR 52;

Court NSWSC

Date 31/10/2000

Signal

Court

Date

Signal

HCA

24/3/1999

NSWCA HCA

15/8/1986 6/12/1985

Page 81 (1985) 11 Fam LR 930; (1985) DFC 95-020; (1986) NSW ConvR 55-274; (1985) V ConvR 54-183; [1985] HCA 78; BC8501051 [1983] 2 NSWLR 561; (1983) 58 ALJR 22b; [1983] 1 WLR 1232 (1876) 4 Ch D 583 (1863) 33 LJ Ch 106

Considered Considered Cited

Hogan v Hogan Cuddon v Cuddon Scholefield v Lockwood

UKPC EWHCC h -

20/7/1983 20/12/1876 6/11/1863

Legislation considered by this case Legislation Name & Jurisdiction Conveyancing Act 1919 (NSW)

Provisions s 145

Page 82

Page 83

5 of 10 DOCUMENTS: Unreported Judgments NSW 48 Paragraphs

KEOGH v RUSH - BC200103795

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL MASON P, HEYDON JA AND YOUNG CJ IN EQ 40967/00 22 June 2001, 13 July 2001 Keogh v Rush [2001] NSWCA 227
Equity -- Life tenant and remaindermen -- Life tenant discharging mortgage -- Remaindermen offering to reimburse capital plus applicable interest -- Life tenant surviving 30 years after discharge of mortgage -- Property increasing in value over those 30 years -- Whether life tenant's estate entitled in equity to share of increase -- Held "No".

Mason P
[1] I agree with Young CJ in Eq.

Heydon JA
[2] I agree with Young CJ in Eq.

Young CJ in Eq
[3] This is an appeal from a decision of Master Macready to whom the whole proceedings had been referred for trial. [4] Before the Master, the plaintiff sought a declaration that the defendant held half the proceeds of the sale of 10 Crown Street, Henley ("the Henley Property") on trust for him. Alternatively the claim was for an equitable charge over part of such proceeds. [5] The defendant conceded the claim for an equitable charge. However, the matter proceeded before the learned Master, who held that there was a constructive trust over 45% of the proceeds in favour of the plaintiff. The defendant appealed. [6] The facts are fairly straight forward and not in dispute, though there are some gaps in the evidence doubtless caused by the lapse in time since the relevant events occurred. The facts as found by the Master are as follows. [7] In about 1948, Mr Brewer became a boarder with Mrs Tyson at Dover Heights. By 1950, they had formed a de facto relationship. In that year, Mr Brewer purchased the Henley Property for 1,800. The

Page 84 purchase price was paid as to 700 from Mr Brewer's own funds, 950 from a mortgage to MUIOOF and 150 borrowed from Mrs Tyson. [8] The Henley Property was bought in Mr Brewer's name alone. [9] Mr Brewer died on 24 August 1952. He had first made and published his last will on 9 March 1951. Probate of this will was granted to the defendant and present appellant on 24 August 1954. [10] After appointing the appellant as executor, the will provided: "I give devise and bequeath unto my defacto wife Eileen Tyson of 2 Crown Street Henley Gladesville for her absolute use and benefit all my real and personal estate wheresoever situated: for her life. After her death I direct that my estate be sold and the proceeds be equally divided between my grand nephew Kark van Rhoan of No 1 Culver Street Brighton-le-Sands and grand niece Susan Penny Flarming of the Carrageen Flats Wild Street Potts Point to do with as they wish. "I hereby clearly state that all the furniture in my home at 2 Crown Street Henley is the absolute property of Eileen Tyson having been brought from her flat at 66 Lancaster Road Dover Heights or having been purchased by her since. Further she holds a second mortgage for 150 pounds (One Hundred and fifty pounds) on my property. She having loaned this to me to enable me to purchase our home." [11] There was no evidence that any formal second mortgage document was ever generated in respect of Mrs Tyson's loan. [12] The Affidavit "D" filed for death duty purposes disclosed that the Henley Property was Mr Brewer's only substantial asset. It also disclosed that the amount then owing to MUIOOF was 852/5/7. The Henley Property was valued at 2,000. [13] There was no cash money available to pay the debts, funeral and testamentary expenses including death duty. The appellant took out a further mortgage for 135 from MUIOOF. He used the proceeds to pay the estate expenses. [14] Although, there was no evidence as to what actually occurred, there must have been some arrangement made between the appellant and Mrs Tyson to the effect that the latter would pay the monthly payments on the mortgages (which were in respect of both capital and interest) from the earnings of the boarding house she was carrying on in the Henley Property. Such an arrangement was beneficial to all parties. The property would remain intact, the life tenant could use them to generate income and the estate debts would be paid. [15] Mrs Tyson had fully repaid the capital and interest on the mortgages by 1965. It was agreed that the cost to her between 1952 and 1965 was $2,684. The parties also agreed that the appropriate amount of interest that should be allowed to Mrs Tyson on this sum was $11,235. In addition, a further sum of $1,388 was conceded, thus making a total of $15,307 that the appellant acknowledged that he would pay the respondent, whether through legal necessity or as an ex gratia payment. [16] Mrs Tyson also effected repairs and improvements, at least up to the early 1980s. [17] The respondent, Mr Rush originally went to board with Mrs Tyson shortly after Mr Brewer's death. He paid board to Mrs Tyson up until the time when she recognized that he was providing the services of a carer for her (he was a trained nurse) and she ceased accepting board. [18] Mrs Tyson died on 12 February 1998 aged 93 years. She appointed the respondent her executor and sole beneficiary. [19] Mrs Tyson paid the rates on the property until relatively recently when she purported to participate in a rate deferral scheme. This meant that, on her death, arrears of rates of $11,641.38 were charged against the Henley Property. [20] The Henley Property was sold and the proceeds invested pending the outcome of the present litigation. After payment of the rates and expenses, but with accrued interest, there was approximately $475,000 to be distributed to those entitled.

Page 85 [21] There was some evidence accepted by the Master that Mrs Tyson had said to her niece on a number of occasions that she would like to leave the property to the respondent and that she was peeved that she could not. It appears that Mrs Tyson had sought and obtained some legal advice as to her position. The significance of this is that while she may have expressed peevishness, she never asserted any equitable claim during her lifetime. [22] The learned Master held that Mrs Tyson was put in a difficult situation when Mr Brewer died. She either had to meet the mortgage personally or face the sale of the Henley Property which would deprive her of her income. She thus had little choice but to pay off the mortgages and take in boarders to survive. [23] The Master then concluded his reasons as follows: "One thus has a circumstance of a vulnerable Mrs Tyson who had little alternative. In these circumstances the executor, and through her, the remaindermen had everything to gain by allowing her to pay off the mortgage. "It would seem to me that in those circumstances it would be unconscionable for the remaindermen, through the executor, to insist on their legal rights to the full ownership of the property on the death of Mrs Tyson and thus deny even the remedy of a lien to secure repayment of the funds provided. I am mindful in coming to this conclusion of the evidence of Mrs Tyson's knowledge of her rights and the choice which she made. She was not misled by the remaindermen or Mr Keogh and the case is thus outside the realms of that part of equity which deal with mistaken expenditure on another's property. The executor, Mr Keogh, and through him the remaindermen, sat by and allowed Mrs Tyson to provide for them about 45% of the value of the property as at the date of death of Mr Brewer. "It is thus necessary to turn to a consideration of what is the appropriate remedy. I have already earlier in this judgment talked of the different remedies that may be available and the difference between them. There are a number of aspects which could be taken into account in deciding whether or not to grant a remedy which gives the plaintiff the opportunity to participate in the increased value of the property over the years. These are as follows:(a) There is a clear connection between the payment of the amount off the mortgage and the ultimate retention of the property. Normally one does not now need to have had some right of ownership for there to be a remedy by way of constructive trust. (b) There are no third parties involved in this matter and such interests do not have to be considered. (c) There would be no personal remedy that the plaintiff's estate would have for the recovery of her funds. (d) There was a substantial delay in the sense that Mrs Tyson although she complained about it did nothing about the fact that she had paid off the mortgages by 1965. Such delay can only work to the benefit of the remaindermen as the facts have turned out in the present case. There is no suggestion of alteration of position or detriment as far as the remaindermen are concerned. The delay was all to their advantage. (e) The remaindermen will still have the benefit of the increases due to inflation on their 55% share which they would not have achieved if Mrs Tyson had not paid off the mortgages. "It seems as a result of these factors that Mrs Tyson's estate should have the remedy of a constructive trust which gives him a proportionate share of the property to which Mrs Tyson has contributed. On the figures Mrs Tyson contributed 45% of the value of the property as it was valued at the time she commenced her repayments of the mortgage. She has also, of course, paid the interest on that mortgage but the capital share is 45%." [24] At the hearing of the appeal, Mr P Hallen SC and Ms R Winfield for the appellant, put that the facts in this case showed no cause for equity to interfere at all. At least once the appellant conceded that the remaindermen accepted a charge over the property for the capital repaid by the life tenant plus interest as they had done, there was no unconscionability revealed at all. [25] On the other hand, Mr W Hodgekiss for the respondent, put that this was a classic case of what was termed "Outcome Unconscionability".

Page 86 [26] "Outcome Unconscionability" is a term which evidently has its origin in the judgment of McHugh JA in a case on the Contracts Review Act 1980, West v AGC Advances Ltd (1986) 5 NSWLR 610, 620 where he remarked that a contract may be unjust either because of the manner in which it was brought into being or because of the way it operates. This is hardly a good basis for the use of the term "Outcome Unconscionability" in this area of equity. However, the term is tentatively employed by Wright, in his "The Remedial Constructive Trust" (Butterworths, Sydney, 1998) [3.33] p92. [27] The preferable manner of examining this class of case is to turn to the classic judgment of Deane J in Muschinski v Dodds (1985) 160 CLR 583, 615 where his Honour said that the remedial constructive trust "is available only when warranted by established equitable principles or by the legitimate processes of legal reasoning, by analogy, induction and deduction, from the starting point of a proper understanding of the conceptual foundation of such principles..." [28] There are some situations where if a person obtains a windfall profit, his or her conscience will be affected so that there must be some heed paid to the rights of others. However, this will not apply to all windfall profits. There must be something in the circumstances which will affect the conscience. Traditionally, three particular situations attract equity's attention, Accident, Relief against Forfeiture and the Failed Joint Venture scenario depicted in Muschinski's case at p618. [29] There are many situations where a person obtains an unexpected (and perhaps morally undeserved) windfall where there is nothing against the conscience. One example that comes to mind is illustrated by Hogan v Hogan [1983] 1 WLR 1232 where a woman inherited a large estate because she was the beneficiary in a will made 30 years previously by a man with whom she was then cohabiting, who had never got round to making a new will in favour of subsequent de facto wives or ex nuptial children. [30] However, even before one can discuss a case as being a windfall case in which equity might interfere, one has got to examine the facts to see what are the rights and obligations of the parties under the general law. [31] Mr Brewer's will did not contain any provisions as to the mortgage. However, by s145 of the Conveyancing Act, 1919 or otherwise, the Henley Property was charged with the mortgage to MUIOOF and probably also with the debt of 150 owing to Mrs Tyson. Under the general law, the capital of the mortgages (including the additional mortgage for 135) was to be borne by the remaindermen and the income by the life tenant. Mrs Tyson paid out the capital. The result is, as Jessel MR said in Cuddon v Cuddon (1876) 4 Ch D 583, 585: "Where a tenant for life discharges an incumbrance on the capital instead of merely keeping down the interest, the presumption is that it is done for the benefit of the remaindermen and he is entitled to a charge on the capital for the amount he has thus paid, though the presumption may, of course, be rebutted." [32] There is nothing to rebut the presumption in this case. [33] Had everything been done according to the book, Mrs Tyson would have paid the appellant the monthly mortgage payments and he would have onpaid them to MUIOOF. The appellant would have kept accounts and debited the remaindermen with the capital debt and the life tenant with the interest and the rates. On the fall of the life interest, the appellant would have produced accounts, which, if accepted, would have wound up the trust and enabled the Henley Property to be sold and the proceeds distributed to the remaindermen. The proper time for taking accounts is at the date of death of the life tenant: Scholefield v Lockwood (1863) 4 De GJ & S22; 46 ER 822, 825. [34] The parties did not do everything by the book. Probably this is for the very good reason that it would be too expensive to do so and that the informal arrangement they must have made produced what is often called a "win/win" situation. However, the basic rights of the parties remained the same. [35] Why did this scenario produce a windfall profit in respect of which equity would give relief? [36] Certainly, the remaindermen, whose estate had vested in interest as early as 1952 obtained far more than they would have expected in 1952. However, this was the result of the lapse of time rather than any

Page 87 other cause. [37] The life tenant received all she could reasonably have expected from the property in 1952. Indeed, she received 46 years' occupation and profits. No-one could complain of this as this result naturally flowed from the devise to her of a life estate. [38] It is difficult to see anyone whose conscience was affected by what occurred. Mr Brewer provided the benefaction, both the life tenant and the remaindermen obtained what Mr Brewer devised to them - nothing more, nothing less. [39] The Master, however, found that although Mrs Tyson knew her rights and was not in any way misled by the appellant or the remaindermen, nonetheless "The executor...and through him the remaindermen, sat by and allowed Mrs Tyson to provide for them about 45% of the value of the property at the date of death of Mr Brewer." [40] With respect, I cannot see anything unconscionable in sitting back and allowing Mrs Tyson to do what she did. It benefited her as well as the remaindermen, but the remaindermen would have to account in due course for the capital sum outlaid by the life tenant, which, in due course, they did. [41] Thus, in my view, the facts of this case do not provide any equity which would warrant the court making the order that the learned Master made. [42] I should make a couple of observations before dealing with costs. [43] First, I must note that before the Master there was a cross-claim for the amount of unpaid rates. The Master found a verdict for the appellant for $11,641.38. There has been no appeal from this verdict. I wonder about the form of the cross-claim. It would seem to me that the claim should have been part of the general accounts between the parties, though it is arguable that there was an indebitatus count. In practical terms it matters very little as the liability, in whatever form it took, was conceded. [44] Secondly, I do not wish to be taken as holding that, if the appellant had not acknowledged the charge over the property for the liability to repay the capital paid by the life tenant plus interest, some equity would have arisen. However, that equity would have been no more than such a charge; see Giumelli v Giumelli (1999) 196 CLR 101, 113. [45] Thirdly, the view that I have taken of the case makes it unnecessary to consider what might be substantial issues if the Master's view were taken. These would include the compound question, when did the duty in conscience arise and who owed it, the trustee of Mr Brewer's estate or the remaindermen? There might also need to be an examination as to how far it is legitimate to give a proprietary type remedy to an executor of a life tenant's estate in respect of a personal equity held by the life tenant whilst that estate still subsisted. [46] As to costs, the learned Master ordered that the defendant pay the plaintiff's costs of the claim and that the plaintiff pay the defendant's costs of the cross-claim with the defendant trustee to be indemnified out of the fund. [47] In my view, the dispute before the Master should have been a dispute over the administration of a trust fund. However, the way the case was run was adversary litigation in which the respondent claimed an interest contrary to the trust. He has failed and should pay the costs before the Master. He has also failed on the appeal and should pay the costs of the appeal, but, if entitled should have a certificate under the Suitors Fund Act. [48] The Orders that should be made are as follows:1. Appeal allowed. 2. Orders of Master Macready on the claim set aside. 3. Order that, in lieu, the proceedings be dismissed with costs. 4. Note that these orders are made on the basis that the appellant's counsel has informed the court that the

Page 88 appellant is ready willing and able and intends to pay to the respondent the amount necessary to reimburse the respondent for the capital payments made to remove the mortgages on the subject property plus applicable interest. 5. Order that the respondent pay the appellant's costs of the appeal, but is to have a certificate under the Suitors Fund Act in respect of such costs. 6. Liberty to apply. Order 1. Appeal allowed. 2. Orders of Master Macready on the claim set aside. 3. Order that, in lieu, the proceedings be dismissed with costs. 4. Note that these orders are made on the basis that the appellant's counsel has informed the court that the appellant is ready willing and able and intends to pay to the respondent the amount necessary to reimburse the respondent for the capital payments made to remove the mortgages on the subject property plus applicable interest. 5. Order that the respondent pay the appellant's costs of the appeal, but is to have a certificate under the Suitors Fund Act in respect of such costs. 6. Liberty to apply. Counsel for the appellant: P Hallen SC and R Winfield Solicitors for the appellant: Thornton Laywers Counsel for the respondent: W Hodgekiss Solicitors for the respondent: Symons & Company

Page 89

Page 90

6 of 10 DOCUMENTS: Unreported Judgments WA 16 Paragraphs

PERPETUAL TRUSTEES WA LTD (as Executor of the Estate of DARVELL) v DARVELL - BC200102522
SUPREME COURT OF WESTERN AUSTRALIA IN CHAMBERS WHEELER J CIV 1448 of 2000 14 March 2001, 18 May 2001 Perpetual Trustees WA Ltd as Executor of the Estate of Henry James Darvell v Darvell & Ors [2001] WASC 123
Equity -- Trusts -- Application by trustee for directions -- Life tenant and remainderman -Maintenance and payment of outgoings -- Turns on own facts Succession -- Wills, probate and administration -- Construction and effect of testamentary dispositions No new point of principle Trustees Act 1962 (WA) Case(s) referred to in judgment(s):

1 2 3 4 5

Carrodus v Carrodus [1913] VLR 1 Ford v Keenan (1914) 30 NSW WN 214 Gibbons v Gibbons [1920] 1 Ch D 372 Lehman v Haskard, unreported; SCt of NSW; Equity Div; 29 August 1996 Perpetual Trustee Co Ltd v Godsall [1979] 2 NSWLR 785

Case(s) also cited:

6 7 8 9 10 11 12

Edwards v Edwards (1918) 24 CLR 312 MacLaren v Stainton (1858) 27 LJCh 442 O'Hern v O'Hern, unreported; SCt of WA; Library No 7358;10 November 1988 Perpetual Trustees WA Ltd (as Executor of the will of Goyder (dec)) v Goyder & Ors, unreported; SCt of WA; Library No 990138; 24 March 1999 Re Herklot's Will Trusts [1964] 2 All ER 66 Re Sinnamon (dec) [1940] QWN 41 Re Trusts of the Will of Gilchrist (1867) 6 SCR (NSW) Eq 74

Page 91

13 14 15 Wheeler J

The Trustees Executors & Agency Co Ltd v Jope (1902) 27 VLR 706 Thomas v Haworth (1918) 20 WALR 78 Wilkie v The Equity Trustees Executors & Agency Co Ltd [1909] VLR 277

[1] The plaintiff as trustee seeks directions in the administration of the trust settled by the will of Mr Henry James Darvell ("the deceased"). The deceased died on 22 April 1983. Terms of the deceased's will are, inter alia: "I GIVE AND DEVISE my real estate known as 48 Henry Street East Cannington and the furniture and other articles of household use and ornament contained therein to my Trustee UPON TRUST to allow the use and occupation thereof to my daughter MARION FAITH DARVELL so long during her lifetime as she chooses to have the same she being liable for the payment of rates, taxes, insurance premiums, maintenance and other outgoings thereon and SUBJECT THERETO I GIVE my residuary estate to such of my children the said ANTHONY JOHN DARVELL, the said MARION FAITH DARVELL, DOREEN DAPHNE LEENBRUGGEN and PATRICIA JUNE BRINDLEY as shall survive me and if more than one in equal shares ..." [2] The questions which the plaintiff seeks to have answered are as follows: 1 Whether the first defendant has a life interest in the property at 48 Henry Street, East Cannington ("the property")? 2 Alternatively, whether the first defendant has a right of occupation of the property? 3 Whether the first defendant's interest in the property is conditional on her making payment of the rates, taxes, insurance premiums, maintenance and other outgoings? 4 If her interest is conditional, whether it has lapsed? 5 If the first defendant's interest in the property has lapsed, then a direction that the property be sold and the proceeds distributed between the defendants. 6 If the first defendant's interest in the property has not lapsed, a direction that the plaintiff sell the property and purchase from the proceeds a property for the occupation of the first defendant or, alternatively, invest the net proceeds of sale and pay the income thereof to the first defendant for her lifetime and then upon her death distribute the capital in accordance with the will. [3] Not much background material is necessary. The first defendant is the youngest of the children of the deceased, being 40 years of age at the date of his death. The other children named in the will were 45, 48 and 55 years of age. Anthony Darvell died in 1999 and the second defendant is his executor. The property was apparently purchased in 1964 and was occupied by the deceased, his wife (also now deceased) and the first defendant. Apart from renovations to the kitchen and bathroom in 1964, no further improvements were made to the house by the deceased. While she lived with her parents, the first defendant assisted in payment of insurance and council rates. She spent some sums of money prior to 1984 on what might be described as maintenance work on the house. However in 1985 she became unemployed and has been unemployed, except for a period of approximately four months. [4] It seems not to be in dispute that the property is now in a state of disrepair with rust in the roof and sagging of the roof, some windows being either missing or broken, the house paint being flaked and deteriorated, the garden being very unkempt, and the interior having damage to some walls and ceilings. The first defendant has not punctually paid council and Water Corp rates. Further, certain insurance for the property has been paid by the plaintiff rather than by the first defendant. There is an affidavit of the first defendant in which she deposes to the reasons for her having fallen into arrears with these payments, and to the arrangements which she has made and is in the process of carrying out to discharge those arrears. It is common ground that there is no other trust property.

Page 92

The nature of the first defendant's interest [5] Questions one and two deal with the same issue. The words "occupy" and "use" are both words tending to suggest that what is intended is not a mere right to reside but the conferral of a life interest: see Gibbons v Gibbons [1920] 1 Ch D 372, Ford v Keenan (1914) 30 NSW WN 214, Lehman v Haskard, unreported; SCt of NSW; Equity Div; 29 August 1996. [6] It is suggested that one indication that what was intended was something less than a life interest in the property is the fact that the first defendant is to be found among the remaindermen, so that it appears that the testator contemplated that her interest could come to an end during her lifetime. However, this appears to me only a weak indication. It may equally be that the deceased contemplated that the first defendant could have the occupation of, or income from the property during her life but that it would be appropriate to give her the option of foregoing that interest at some stage in favour of a share of the capital, which in that event was to be divided between the deceased's four children equally. It is my view that a life interest in the property in favour of the first defendant was created by the will. Is the interest conditional? [7] Plain words are required to establish that a requirement such as that found in this will is a condition of the interest continuing rather than in the nature of a direction or expectation: Lehman at p8, Carrodus v Carrodus [1913] VLR 1. It is suggested that the words "and subject thereto" may be intended to suggest that the interest given is conditional. However, they are oddly placed to perform this task. Appearing where they do in the will they rather suggest that it is merely intended to convey that the gift to the remaindermen is subject to the first defendant's interest so long as she chooses to have it, in contrast to conveying an intention that she could occupy the property subject to her payment of rates. The nature of the duty cast upon the first defendant also makes it unlikely that the duty is imposed as a condition of her life estate continuing. The payment of rates, taxes and probably insurance premiums is a duty which is clear and breach of which is readily ascertainable; however, it seems unlikely that the deceased intended that any failure of maintenance or failure to pay any "other outgoing" of whatever nature should have the result that the life estate would be forfeited. The trustee's duty [8] The plaintiff is naturally concerned about fairness as between the first defendant and the other remaindermen, and raises the question of what, if anything, should appropriately be done by the plaintiff if the life interest continues, as I have found it does. [9] In some cases, a question might arise as to whether there was power for the trustee to enter the premises and effect repairs and either to recover the cost of those repairs from the first defendant or to make provision for them in some other way. However, I do not think that the issue of repair and maintenance is of present importance in this case. The only evidence which is before me as to the value of the property, is that the house adds nothing whatever to its value and that it would at present be of interest only to a purchaser who wished to redevelop it. A valuation undertaken some years ago suggested that the house might be of some value but that was very limited in comparison to the value of the property as a whole. The present value of the property is said to be in the region of $80,000, while the cost of bringing the house into a good state of repair is estimated at in the region of $85,000. It may be, however, in the light of the first defendant's affidavit that repairs of that magnitude would have the effect of improving the house beyond the state in which it was at the deceased's death. There is no evidence that repairs of any kind, or any cost, would have the effect of adding, significantly or at all, to the present "block value" of the property. In those circumstances, there is no evidence that the failure to maintain is causing any detriment to the remaindermen. It might be seen as a detriment to the first defendant in her enjoyment of her life interest, but it appears that she chooses to remain in the property in its present state, and that is a matter for her. [10] The non-payment of rates and taxes stands in a somewhat different position, in my view. A local authority has power ultimately to ensure that the property is sold in order to recover its unpaid rates. The

Page 93 evidence is that the local authority in this case resolved in March last year to take that course, prior to the current arrangements which have been made for gradual clearing of the rate arrears. [11] At the present time, since satisfactory arrangements appear to have been made for payment of arrears of council and water rates, and since the first defendant deposes in her affidavit that she proposes to continue with those arrangements and that she has made an arrangement to discharge the debt owed to the plaintiff in relation to the insurance, There is apparently no present need for any step to be taken by the trustee in respect of those matters. [12] However, it is of course foreseeable that the first defendant may fall behind in payment of rates in future. Were that to occur, it appears to me that the trustee would have power to make those payments and to look to the first defendant for repayment of those amounts. The power in the plaintiff and the liability of the first defendant in that case would arise under one of two principles. Either because the first defendant in taking the benefit of the life interest is in equity made liable to the obligation imposed by the will, which is enforceable in equity: Perpetual Trustee Co Ltd v Godsall [1979] 2 NSWLR 785 at 793; or alternatively, the case might be one of "salvage" properly so called in that the testator's intention could not be effectuated if the payments were not made in connection with the trust. [13] However, as I have indicated, there appears to be no present need for the plaintiff to make payments in relation to rates, taxes and insurance. It was suggested to me that it would be appropriate for me simply to adjourn any further consideration of this matter for a reasonable period so that the first defendant would have the opportunity to continue clearing those arrears and so that the plaintiff could bring the matter back before the court should there be any failure by the first defendant to do that which she has said she proposes to do. The difficulty with that course, it seems to me, is that if I was to adjourn the originating summons, the question might arise as to whether it would be appropriate to relist the matter before another judge, should I for any reason be unavailable. It is conceivable, given the earlier resolution of the local authority to which I have referred, that it may be necessary at some stage in the future to take action expeditiously to preserve the estate. It therefore seems to me preferable to answer the questions in the originating summons so as to finally dispose of it, and to leave it to the plaintiff to seek fresh relief should the first defendant fail in any of her obligations in the future in a way which threatens the estate. The proposal for sale of the property [14] It follows from what I have said that there appears to be no pressing need at present to sell the property. The first defendant wishes to remain in it, although if it were to be sold for any reason she would seek to have the plaintiff purchase some smaller and more manageable property in which she could reside in substitution for the property. Because there is no scheme which appears to be acceptable both to the first defendant and to the other remaindermen presently before the court, and because there is no evidence that the estate is presently in jeopardy or that the first defendant cannot continue to reside in the property, it seems to me that it is inappropriate at this stage to consider whether the court has power to order such a sale or whether it would be in the interests of the remaindermen that such a sale and substitute purchase occur. Conclusion [15] I would therefore answer the questions posed in the plaintiff's originating summons as follows: 1 Whether the first defendant has a life interest in the property situate at 48 Henry Street, East Cannington ("the property")?---Yes. 2 Unnecessary to answer. 3 Whether the first defendant's interest in the property is conditional on the first defendant making payment of the rates, taxes, insurance premiums, maintenance and other outgoings on the property?---No. 4 Unnecessary to determine. 5 Unnecessary to determine.

Page 94 6 Unnecessary to determine. 7 I will hear counsel as to the costs of the application. [16] I should indicate my preliminary view that the application was made necessary by the failure of the first defendant to comply with the obligations which the will imposes on her, which failure at one stage appeared to put the interests of the remaindermen in jeopardy. As a matter of first impressions it would appear to be a case in which it would be appropriate to order that the costs be paid from income or from the first defendant's share of capital. Order The first defendant does have a life interest in the property which is not conditional upon making payment of the rates, taxes, insurance premiums, maintenance and other outgoings on the property. Counsel for the plaintiff : Ms M R Bloch Solicitors for the plaintiff : M R Bloch Counsel for the defendants: Mr S M Standing Solicitors for the defendants: Freehills

Page 95

Page 96 7 of 10 DOCUMENTS: CaseBase Cases

McLauchlan v Prince
[2001] WASC 43; BC200100391 Court: WASC Judges: Sanderson M Judgment Date: 21/2/2001

Catchwords & Digest

Equity -- Equitable remedies -- Trustee's wilful default -- Summary application to have trustee aacount on basis of wilful default Whether plaintiff entitled to account on basis of wilful default. Whether open to court to grant relief on summary basis. Whether appropriate to order payment of compound interest. First and second defendants were appointed as trustees of trust created by deceased's will. Plaintiff is life tenant of trust. Plaintiff claimed estate depleted by numerous investments not authorised by law. Plaintiff claimed depletion occurred as result of first defendant's failure to supervise or participate in second defendant's investments. First defendant acknowledged second defendant's investment was made in breach of trust. No conflict of evidence on affidavits. Held: Application granted. Open to court to grant relief on summary basis. Application under (WA) Rules of the Supreme Court 1971 O 45 was akin to application for summary judgment under O 14 of Rules. As there is no conflict of evidence on affidavits summary judgment available. First defendant's failure to supervise his fellow trustee and to participate in investment decisions constituted wilful default. Appropriate to order payment of compound interest, not as measure of compensation to plaintiff, but to ensure profit which equity presumes would have been made had there been no wilful default on first defendant's part, is paid to plaintiff. Litigation History Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations [2002] WASC 274; Related McLauchlan v Prince BC200207057 Cases referring to this case Annotations: All CasesSort by: Judgment Date (Latest First) Annotation Case Name Citations [2011] SASC 47; Considered Kaptsis v Kaptsis BC201102007 Cited Bassett v Atherley [2011] WASC 117;

Court WASC

Date 25/11/2002

Signal

Court SASC WAS

Date 7/4/201 1 1/9/201

Signal

Page 97 Considered Considered Cited Cited Considered Applied Bauer v Hussey Hons v Hons Atwell v Roberts Koh v Pateman Green v Wilden Pty Ltd Grove v Fisher BC201010613 [2010] QSC 269; BC201005327 (2010) 3 ASTLR 278; [2010] NSWSC 247; BC201001887 [2009] WASC 96; BC200902853 [2005] WASC 172; BC200506041 [2005] WASC 83 (S); BC200505844 [2002] WASC 247; BC200206462 C QSC NSW SC WAS C WAS C WAS C WAS C 0 30/7/20 10 1/4/201 0 17/4/20 09 10/8/20 05 9/8/200 5 31/10/2 002

Cases considered by this case Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations [1999] WASC 13; Considered Gava v Grljusich BC9902403 Clarke v Australian Applied BC9804270 Guarantee Corporation Ltd (1993) 177 CLR 598; (1993) 116 ALR 545; (1993) 67 ALJR 886; Considered Webster v Lampard (1993) Aust Torts Reports 81-236; (1993) 68 LIJ 64a; [1993] HCA 57; BC9303614 Ledger v Petagna Nominees Considered (1989) 1 WAR 300 Pty Ltd Ninety Five Pty Ltd (in liq) v [1988] WAR 132; Considered Banque Nationale de Paris BC8700742 President of India v La [1985] AC 104; [1984] Considered Pintada Compania 2 All ER 773; [1984] 3 Navigacion SA WLR 10 [1980] Ch 515; [1980] Bartlett v Barclays Bank 1 All ER 139; [1980] 2 Considered Trust Co Ltd (Nos 1 & 2) All ER 92; [1980] 2 WLR 430 Moscow Narodny Bank Ltd v Considered Mosbert Finance (Aust) Pty [1976] WAR 109 Ltd [1975] QB 373; [1975] Wallersteiner v Moir (No 2); Considered 1 All ER 849; [1975] 2 Moir v Wallersteiner (No 2) WLR 389 [1945] VLR 99; [1945] Cited Dawson v Dawson ALR 64 (1932) 32 SR (NSW) Cited Dalrymple v Melville 596; (1932) 49 WN (NSW) 206 Vickery, In re; Vickery v Cited [1931] 1 Ch 572 Stephens

Court WASC WASC

Date 14/5/1999 27/8/1998

Signal

HCA

14/10/1993

WASC WASC UKHL

23/6/1989 30/7/1987 24/5/1984

15/1/1980

WASC EWCAC iv VSC NSWSC EWHCC h

5/5/1976 29/1/1975 30/6/1944 6/9/1932 21/1/1931

Page 98 Cited Considered Lewis v Nobbs Docker v Somes (1878) 8 Ch D 591 (1834) 2 My & K 655; (1834) 39 ER 1095 EWHCC h 9/5/1878 22/4/1834

Legislation considered by this case Legislation Name & Jurisdiction Rules of the Supreme Court 1971 (WA)

Provisions O 14 r 2(1), O 45 r 1

Page 99

Page 100 8 of 10 DOCUMENTS: CaseBase Cases

Rush v Keogh
[2000] NSWSC 624; BC200006581 Court: NSWSC Judges: Macready M Judgment Date: 31/10/2000

Catchwords & Digest

Trusts -- Constructive trusts -- Repayment of mortgage by life tenant -- Unconscionable retention of benefit of unencumbered estate Where man and woman living in de facto relationship. Where man registered proprietor of residential property. Where woman given life estate in residential property under man's will. Where plaintiff taken in as lodger by woman after man's death. Where plaintiff became woman's carer. Where plaintiff appointed executor and sole beneficiary under woman's will. Where defendant trustee of man's estate. Where residential property purchased in man's name. Where mortgage over residential property also in man's name. Where woman repaid mortgage after death of man. Where woman's financial position vulnerable at time of death of man. Where defendant sold residential property after death of man. Whether plaintiff entitled to imposition of constructive trust. Whether plaintiff entitled to equitable charge over proceeds of sale of residential property for woman's repayment of mortgage plus interest. Whether there is resulting trust of amount woman contributed to purchase price of residential property. Whether unjust enrichment fundamental principle underlying imposition of constructive trust. Whether unconscionability fundamental principle underlying imposition of constructive trust. Analysis of case law relating to constructive trusts. Whether retention of legal estate for benefit of remaindermen unconscionable. Comparison of position of remaindermen with and without mortgage repaid. Assessment of woman's contribution to value of residential property. Whether plaintiff entitled to imposition of constructive trust. Held: Unconscionable for executor and remaindermen to insist on legal right to full ownership of residential property without accounting for woman's contribution through repayment of mortgage. Plaintiff entitled to imposition of constructive trust as she contributed 45 per cent of value of residential property. Litigation History Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations Reversed Keogh v Rush (2001) 10 BPR 18,891; [2001] NSWCA 227;

Court NSWCA

Date 13/7/2001

Signal

Page 101 BC200103795 Cases considered by this case Annotations: All Cases Sort by: Judgment Date (Latest First) Annotation Case Name Citations (1994) 34 NSWLR 9; Considered Carson v Wood BC9405119 (1992) 29 NSWLR 188; Considered Bryson v Bryant (1992) 16 Fam LR 112; (1992) DFC 95-131 (1989) 17 NSWLR 343; Considered Green v Green (1989) 13 Fam LR 336; (1989) DFC 95-075 Considered Collins v Kerry BC8901725 Considered Walker v McClelland BC8801799 (1987) 164 CLR 137; (1987) 76 ALR 75; (1987) 62 ALJR 29; Applied Baumgartner v Baumgartner (1987) 11 Fam LR 915; (1988) DFC 95-058; [1987] HCA 59; BC8701827 Stephenson Nominees Pty (1987) 16 FCR 536; Considered Ltd v Official Receiver (1987) 76 ALR 485 (1985) 160 CLR 583; (1985) 62 ALR 429; (1985) 60 ALJR 52; (1985) 11 Fam LR 930; Considered/ Muschinski v Dodds (1985) DFC 95-020; Applied (1986) NSW ConvR 55-274; (1985) V ConvR 54-183; [1985] HCA 78; BC8501051 (1984) 156 CLR 41; (1984) 55 ALR 417; Hospital Products Ltd v (1984) 58 ALJR 587; Considered United States Surgical Corp (1984) 4 IPR 291; [1984] HCA 64; BC8400480 (1983) 151 CLR 447; (1983) 46 ALR 402; Commercial Bank of (1983) 57 ALJR 358; Considered Australia Ltd v Amadio [1983-84] ANZ ConvR 169; [1983] HCA 14; BC8300072 (1963) 110 CLR 309; [1964] ALR 259; Considered Hepworth v Hepworth (1963) 37 ALJR 222; BC6300550

Court NSWCA NSWCA NSWCA NSWSC NSWSC

Date 27/6/1994 30/11/1992 11/10/1989 13/9/1989 24/6/1988

Signal

HCA

10/12/1987

FCA

6/11/1987

HCA

6/12/1985

HCA

25/10/1984

HCA

12/5/1983

HCA

14/11/1963

Page 102

Page 103

9 of 10 DOCUMENTS: Unreported Judgments NSW 47 Paragraphs

RUSH v KEOGH; estate of BREWER - BC200006581

SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION MACREADY M 1451/1999 6 June 2000, 31 October 2000 Rush v Keogh [2000] NSWSC 624
Equity -- Constructive trust -- life tenant paying principal and interest due under mortgage on property subject to life estate. Principles upon which the remedy of constructive trust will be applied. Whether it is necessary to have a triggering mechanism or merely to fall within the rubric of unconscionable conduct. Finding of constructive trust as to 45% of the subject property.

Macready M
[1] In these proceedings the plaintiff seeks a declaration that the defendant holds half the proceeds of the sale of the property at 10 Crown Street, Henley upon trust for the plaintiff or, alternatively, an equitable charge over part of the proceeds of sale of the property. The principal claim is one for the imposition of a constructive trust. The whole of the matter has been referred to a Master for hearing. [2] In 1950 Mr Brewer purchased the property 10 Crown Street, Henley. At the time he was living in a de facto relationship with a Mrs Tyson who contributed some funds to assist with the purchase. Mr Brewer died on 24 August 1952. Thereafter Mrs Tyson continued living in the home as life tenant until she died on 12 February 1998 aged 93 years. Under Mrs Tyson's will the plaintiff was appointed executor and is the sole beneficiary. Mr Rush, the plaintiff, had originally gone to board with Mrs Tyson in 1952 some time after Mr Brewer died and he remained in the property until its ultimate sale after the death of Mrs Tyson. At some stage he ceased to be a boarder and took on the role of carer for Mrs Tyson as he was a trained nurse. At the time of her death Mrs Tyson was 93 years of age. [3] The defendant is the trustee of Mr Brewer's estate. The case is thus unusual in that both parties to the original arrangement in respect of which a constructive trust is sought to be imposed are now dead. [4] It is necessary to deal with the facts in a little more detail. It seems that in about 1948 Mr Brewer became a boarder with Mrs Tyson in Lancaster Road, Dover Heights. Subsequently they apparently lived together and it seems, on the evidence, that by 1950 the parties may have commenced their defacto relationship. In any event the evidence is clear that when the property at Crown Street, Henley was purchased both Mr Brewer and Mrs Tyson lived in a defacto relationship in the premises. The purchase of the property was in Mr Brewer's name the purchase price being 1,800 pounds. A mortgage was taken out with Manchester Unity in the sum of 950 pounds and the balance was apparently paid in cash. It is clear on the evidence that 150 pounds of this cash balance was provided by Mrs Tyson she having funds from the sale of her former matrimonial property. The balance clearly was provided by Mr Brewer. There is a debate as to the circumstances of the provision of the funds of 150 pounds by Mrs Tyson and I will return to that

Page 104 later. The fact of the provision of such funds is not in dispute. The property was purchased in Mr Brewer's name and the mortgage also of course was only taken out by Mr Brewer. [5] As I have recounted Mr Brewer died on 24 August 1952 and probate of his will which is dated 9 March 1951 was granted on 24 August 1954 to the defendant Mr Keogh. The provisions of the will are important. It was a home drawn will which was typed by a secretary in Mr Keogh's office. After appointing Mr Keogh as his executor the will provided:"I give devise and bequeath unto my defacto wife Eileen Tyson of 2 Crown Street Henley Gladesville for her absolute use and benefit all my real and personal estate wheresoever situated: for her life. After her death I direct that my estate be sold and the proceeds be equally divided between by grand nephew Kark van Rhoan of No 1 Culver Street Brighton-le-Sands and grand niece Susan Penny, Flarming of the Carrageen Flats Wild Street Potts Point to do with as they wish. I hereby clearly state that all the furniture in my home at 2 Crown Street Henley is the absolute property of Eileen Tyson having been brought from her flat at 66 Lancaster Road Dover Heights or having been purchased by her since. Further she holds a second mortgage for 150 pounds (One Hundred and fifty pounds) on my property. She having loaned this to me to enable me to purchase our home." [6] It is immediately apparent that there is reference to Mrs Tyson being his defacto wife and the provision for her of a life interest. The will makes reference to her holding a second mortgage for 150 pounds. The evidence before me did not establish the existence of any mortgage although it was clear that the money had been provided. The affidavit "D" in support of the probate application reflected the will showing 150 pounds as a loan to Mrs Tyson. It also showed the amount owing to the first mortgagee as 852 pounds five shillings and seven pence. The property was then valued at 2000 pounds. [7] On 5 April 1955 a further mortgage was taken out with Manchester Unity by Mr Keogh the executor for an amount of 135 pounds. Mr Keogh cannot remember the precise use of these funds but it is tolerably clear that at least death duties of 89 pounds 8 shillings and 6 pence and costs regarding a transmission application of 10 pounds 6 shillings were paid from that advance. [8] The evidence is clear that after the date of death of Mr Brewer, Mrs Tyson repaid over a period of time both these mortgages. The mortgages were eventually repaid by 1965 and the parties are agreed that $2,684 was paid by Mrs Tyson since the date of death of Mr Brewer in respect of the principal and interest under those mortgages. [9] Given the state of the evidence no claim was made that Mrs Tyson repaid any part of the initial mortgage between the date of purchase and the death of Mr Brewer. [10] The plaintiff gave evidence of a number of improvements and repairs that were carried out by Mrs Tyson with his assistance over the period up until the early 1980s. Thereafter there appears to have been little done on the property which suffered some deterioration with repairs being necessary. The trustee, Mr Keogh, sold the property after the death of Mrs Tyson and paid from the proceeds of sale the outstanding rates which had been deferred by Mrs Tyson. The amount of these rates was $11,641.38. After payment the amount of the sale price was invested pending the resolution of these proceedings and the current balance with interest as at 31 May 2000 amounts to $473,787.46. [11] There is a cross claim in which the defendant, Mr Keogh, seeks to claim the amount of the rates which were paid as they were clearly a liability of the life tenant Mrs Tyson. [12] The plaintiff's principal claim was one for the imposition of a constructive trust based upon the principles developed by the High Court in a number of decisions concluding with Baumgartner v Baumgartner (1987) 164 CLR 137. [13] The alternative claims formulated by the plaintiff were first for an equitable charge in respect of the funds paid by Mrs Tyson in discharge of the mortgage after the death of Mr Brewer. As recounted above those funds amounted to $2,684 and the parties are agreed that interest on those payments from the date on which they were incurred totals $11,235. Such interest was calculated at the rate of 5 percent up until 30 June 1972 and thereafter at the Supreme Court rates set out in Schedule J to the Rules.

Page 105 [14] The next alternative claim propounded by the plaintiff is one for a resulting trust in respect of the provision of 150 pounds by Mrs Tyson at the time of purchase. In the further alternative a charge is sought in respect of that sum and the calculations of interest on that sum amount $1,388. It is on the same basis as the previous calculation. [15] The defendant opposes the relief and in particular suggest that the arrangements were not sufficient for the imposition of a constructive trust. In particular they suggest there has been no unconscionable conduct on the part of either Mr Brewer or his executor Mr Keogh in order to found relief. [16] I have already adverted to the evidentiary difficulties in the present case and the absence of evidence from the parties to the de facto relationship in an almost complete way. It is obviously impossible to form any view as to whether there was an express common intention about the ownership of the property at the time of its purchase. There is no doubt, on the evidence, of the contribution by Mrs Tyson of the 150 pounds to the purchase. However, the only evidence concerning the terms upon which that was contributed is that obtained in the will of the deceased in which he stated: "Further she holds a second mortgage for 150 pounds (One Hundred and fifty pounds) on my property. She having loaned this to me to enable me to purchase our home." [17] Although emphasis was made in submissions on the words, "our home" probably more telling is the reference to the 150 pounds being by way of loan. In these circumstances, this being the only evidence, it is impossible to conclude that there would be a resulting trust which would normally be implied as a result of the contribution to the purchase of the property in another's name. Clearly on this evidence the presumption would be rebutted. [18] Before embarking upon a consideration of whether or not a constructive trust might be imposed either as a result of matters arising at the time of purchase or as a result of matters arising after the purchase, (see the judgment of Gleeson CJ in Green v Green (1989) 17 NSWLR 343 at pages 354 to 356) it is necessary that I remind myself of a number of the cautions which are expressed in the cases about how these matters should be approached. The first of these is the fact that community of ownership arising from marriage either de facto or de jure has no place in the law of this state. See Windeyer J in Hepworth v Hepworth (1963) 110 CLR 309, 317 to 319 and the reference by Samuels AJA in Bryson v Bryant (1992) 29 NSWLR 188 at p229 where he refers to the comments by Dickson J in a Canadian case. [19] The other matter when considering the constructive trust is that His Honour Mr Justice Deane in Muschinski v Dodds (1985) 160 CLR 583 said at p615:"...The fact that the constructive trust remains predominantly remedial does not, however, mean that it represents a medium for the indulgence of idiosyncratic notions of fairness and justice. As an equitable remedy, it is available only when warranted by established equitable principles or by the legitimate processes of legal reasoning, by analogy, induction and deduction, from the starting point of a proper understanding of the conceptual foundation of such principles." [20] His Honour went on to say at p616 the following: "The mere fact that it would be unjust or unfair in a situation of discord for the owner of a legal estate to assert his ownership against another provides, of itself, no mandate for a judicial declaration that the ownership in whole or in part lies, in equity, in that other: of. Hepworth v Hepworth 89 (1963) 110 CLR 309, at p317-p318. Such equitable relief by way of constructive trust will only properly be available if applicable principles of the law of equity require that the person in whom the ownership of property is vested should hold it to the use or for the benefit of another. That is not to say that general notions of fairness and justice have become irrelevant to the content and application of equity. They remain relevant to the traditional equitable notion of unconscionable conduct which persists as an operative component of some fundamental rules or principles of modern equity: cf, eg, Legione v Hateley 90 (1983) 152 CLR 406, at p444; Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447, at p461-p464, p474-p475. The principal operation of the constructive trust in the law of this country has been in the area of breach of fiduciary duty."

Page 106 [21] His Honour's conclusion which it must be remembered was in respect of a consideration of the parties' property interests after the breakup of their de facto relationship appears at p620 of the report in the following terms:"Those circumstances can be more precisely defined by saying that the principle operates in a case where the substratum of a joint relationship or endeavour is removed without attributable blame and where the benefit of money or other property contributed by one party on the basis and for the purposes of the relationship or endeavour would otherwise be enjoyed by the other party in circumstances in which it was not specifically intended or specially provided that that other party should so enjoy it. The content of the principle is that, in such a case, equity will not permit that other party to assert or retain the benefit of the relevant property to the extent that it would be unconscionable for him so to do: cf Atwood v Maude 107 (1868) LR 3 Ch. App., at p374-p375, and per Jessel MR, Lyon v Tweddell 108 (1881) 17 Ch. D 529, at p531." [22] His Honour's conclusion was adopted by the majority in Baumgartner v Baumgartner (1987) 164 CLR 137. [23] The flexibility of a constructive trust appears in a number of cases. For instance in Hospital Products Ltd v United States Surgical Corp (1984) 156 CLR 41 at 108 Mr Justice Mason, as he then was, quoted Cardozo J in Beatty v Guggenheim Exploration Co (1919) 225 NY at 389 who said:"A court of equity in decreeing a constructive trust is bound by no unyielding formula. The equity of the transaction must shape the measure of relief." [24] In Green v Green (supra) at 358 Chief Justice Gleeson as he then was referred to the area being one in which equity is at its most flexible. [25] In Muschinski v Dodds (supra) a number of members of the Court referred to the uncertain area to which a constructive trust applies. At p595 Justice Gibbs said:"There is no need in the present case, to attempt to chart further the ill-defined limits of the rules relating to constructive trusts.." [26] On a more positive note Dean J at 614 said:"The acknowledgment of the institutional character of the constructive trust does not involve a denial of its continued flexibility as a remedy..." [27] He went on to say at 616 to 617:"The principal operation of the constructive trust in the law of this country has been in the area of breach of fiduciary duty. Some text writers have expressed the view that the constructive trust is confined to cases where some pre-existing fiduciary relationship can be identified: see, eg, Lewin on Trusts, 16th ed (1964: Mowbray ed), p141. Neither principle nor authority requires however that it be confined to that or any other category or categories of case: cf, generally, Professor R P Austin's essay on "Constructive Trusts" in Essays in Equity, (Finn ed) (1985), esp at p196-p201; Waters, op cit, p28ff. Once its predominantly remedial character is accepted, there is no reason to deny the availability of the constructive trust in any case where some principle of the law of equity calls for the imposition upon the legal owner of property, regardless of actual or presumed agreement or intention, of the obligation to hold or apply the property for the benefit of another: cf Hanbury and Maudsley, op cit, p301; Pettit, op cit, p55." [28] In America, Canada and to an extent in New Zealand, the jurisprudence in respect of constructive trusts draws heavily on principles of unjust enrichment. In Australia there have been suggestions in the cases that this is appropriate. See for example Mr Justice Kirby, as he then was, in Bryson v Bryant (supra) at 205 where he adopted what was said by Mr Justice Toohey in Baumgartner v Baumgartner (supra) at 153:"The notion of unjust enrichment, qualified in this way, is as much at ease with the authorities and is as capable of ready and certain application as is the notion of unconscionable conduct. No doubt, as Professor Waters suggested in "The Constructive Trust", Paper 1 in Where Is Equity Going? Remedying

Page 107 Unconscionable Conduct, lectures delivered at the Law School of the University of Western Australia this year, the task of the courts is "to continue sharpening the edges of the criteria which must be satisfied before the claimant can obtain constructive trust relief". But that exercise is necessary, whichever approach is adopted. The existence of a de facto relationship between the parties constitutes no barrier in either case. The object of a constructive trust is to redress a position which otherwise leaves untouched a situation of unconscionable conduct or unjust enrichment. It is equally applicable to persons in a de facto relationship as it is to spouses." [29] It would seem, however, that the present position of unjust enrichment in the law in Australia may be encapsulated in what Justice Deane said in Muschinski v Dodds at p617. There he said:"In the United States of America, a general doctrine of unjust enrichment has long been recognised as providing an acceptable basis in principle for the imposition of a constructive trust: see, eg, Scott, op cit., vol V, para461. It may be that the development of the law of this country on a case by case basis will eventually lead to the identification of some overall concept of unjust enrichment as an established principle constituting the basis of decision of past and future cases. Whatever may be the position in relation to the law of other common law countries (cf, as to Canada, Pettkus v Becker 92 (1980) 117 DLR (3d) 257 and, as to New Zealand, Hayward v Giordani 93 [1983] NZLR 140, at p148.) however, no such general principle is as yet established, as a basis of decision as distinct from an informative generic label for purposes of classification, in Australian law. The most that can be said at the present time is that "unjust enrichment" is a term commonly used to identify the notion underlying a variety of distinct categories of case in which the law has recognised an obligation on the part of a defendant to account for a benefit derived at the expense of a plaintiff: cf Goff and Jones, op cit, p11. It therefore becomes necessary to consider whether there is any narrower and more specific basis on which, independently of the actual intention of the parties, Mrs Muschinski can claim to be entitled to relief by way of constructive trust in the particular circumstances of the present case. [30] Similar views have been expressed by Gummow J when he was sitting in the Federal Court in Stephenson Nominees Pty Ltd v Official Receiver (1987) 16 FCR 536. In these circumstances it would seem inappropriate for me to consider the present case by reference to concepts of unjust enrichment. But that is not to say that the present case which, after the death of Mr Brewer, falls outside the context of de facto married relationships is one in which the finding of the existence of a constructive trust is not possible. [31] There has started to emerge more writings upon the result which has been achieved as a result of the decisions of Muschinski and Baumgartner. See for example, "The Remedial Constructive Trust" by David M Wright 1998. At p66 he deals with a number of different interpretations which can be placed upon the judgments of the High Court in those cases. One important point he makes is that it is fairly clear that the availability of the constructive trust is not limited to domestic property situations. First, there is nothing in the judgments to indicate this and, indeed, various comments by members of the court indicate that the bounds are somewhat wider. Since the two cases there have been a number of cases applying the principles in a commercial context. See for example, Collins v Kerry, Bryson J 13 September 1989, Walker v McClelland Young J 24 June 1988 and Carson v Wood (1994) 34 NSWLR 9. [32] The second important matter is the question as to whether one adopts a somewhat conservative view of what was said and thus a need to find some appropriate triggering situation in order to attach a constructive trust. In Muschinski Justice Deane found the triggering situation was the analogy between the failed personal relationship and a joint venture which failed without attributable blame. The perhaps more liberal approach to the judgments is one which as Mr Wright indicates involves greater emphasis on the concept of unconscionability. This approach abandons entirely the triggering situation requirement and replaces it with a liability based on unconscionablity. Mr Wright at p67 describes this approach in these terms:"This (restrained) unconscionability approach is restrained in that a claim can only be brought where the unconscionability is actionable. The unconscionability will only be actionable when it is informed by the traditional process of legal reasoning, deduction, induction and analogy. Under this approach

Page 108 unconscionability is not a head of liability which is a 'formless void of individual moral opinion' as it is informed by equitable notions of unconscionability although it is not filtered through any of them." [33] There are two cases at appellate level in New South Wales which have touched these boundaries. One, of course is Bryson v Bryant to which I have referred earlier. In that case the President, Mr Justice Kirby, indicated that the remedy of the constructive trust should not be confined to the context of defacto married relationships which was what the cases in the High Court concerned. In his view the unconscionable actions in retaining the benefits were all that were necessary to found a liability. His Honour Mr Justice Samuels rejected that conclusion and preferred the view that there must be a link between the relevant wife's contributions and the acquisition of property before the court could determine whether the spouse with title was to be accountable as a constructive trustee. His Honour Mr Justice Sheller seems to have decided the matter more upon the fact that he did not find the circumstances as giving rise to an unconscionable retaining of the title. [34] The next matter in which the Court of Appeal has dealt with it is that of Carson v Wood (1994) 34 NSWLR 9. The case concerned a dispute over a trademark and an agreement for transfer which was only partly completed. A transfer of the trademark failed and the defendant asserted that he was the sole legal owner of the trademark. The court held that he held one half of the trademark on constructive trust for the appellant. In that case both Mr Justice Clarke at p18 and Mr Justice Kirby at p10 proceeded straight from the principles in the two High Court cases to reach the conclusion that unconscionability existed and that a constructive trust should be applied. They did not adopt the employment of any triggering situation in order to found liability. His Honour Mr Justice Sheller at p26 also did not employ a triggering situation noting that equity would impose a constructive trust as a remedy to preclude the retention or assertion of beneficial ownership to the extent that such retention or assertion would be contrary to equitable principles. This case tends to indicate that the restrained unconscionabilty approach referred to by Mr Wright is appropriate. [35] There is still enormous difficulty in application of this approach, particularly if one does not adopt the touchstone of whether there has been some unjust retention of benefit. Two important central themes relating to unconscionabilty have been identified by the Finn in his lecture "Unconscionable Conduct (1994) 8 Journal of Contract Law". These are the protection of the vulnerable and reasonable expectations. They are of necessity broad headings of what is comprehended within the meaning of unconscionability. The width of the term unconscionable conduct is referred to by Mason J in Commercial Bank of Australia v Amadio (1982-3) 151 CLR 447 at 461. [36] It is, of course, necessary in the present case to consider not only whether the constructive trust will be imposed but the extent of the remedy to be granted. Cases since Baumgartner have seen the splitting of these two aspects. See the discussion by Mr Wright at p84 - p86. The present case throws up an enormous disparity in remedy depending upon whether the remedy gives a proportion of the present value of the property (value survived approach) or an equitable lien over the property to secure repayment of the funds expended in paying off the mortgage (value received approach). Before moving to this difficult task it is necessary to determine whether a constructive trust should be imposed. [37] There is no doubt in this case that there have been significant changes to what commenced as an ordinary de facto relationship between a man and a woman when the parties concerned moved into the subject property. The following matters are important when considering what change there might have been either at or after the death of Mr Brewer. The evidence discloses:(a) That Mr Brewer was ill in hospital for some 10 months before his death. During that time Mrs Tyson attended on him at the hospital. (b) Mr Keogh, the defendant, an executor for Mr Brewer, recalls that he visited Mr Brewer in hospital Mr Brewer asked him to promise that Mrs Tyson was not to be put out of the house at Henley. He used the words, of the deceased, "Don't let those bastards get the place". The deceased was there referring to his relatives other than the remainderman and their parents. (c) Mr Keogh made it clear that Mrs Tyson made all mortgage payments after Mr Brewer died and he did not advance her any money. Indeed even though he took out the mortgage for the 135 pounds he was

Page 109 certainly satisfied that she repaid it. (d) For Mrs Tyson's part it is clear that she considered whether the house should be sold or whether it should be retained. Mrs Vlaning a great niece of Mr Brewer gave evidence of a conversation that she had with Miss Hill a solicitor who said: "Mrs Tyson has obtained legal advice about whether she can sell your uncle's house in Henley. Her lawyer told her that she could obtain an income from the interest on the balance of the capital after the mortgage is paid out from the sale. She has decided she cannot live on this income so she is going to stay in the house and rent out rooms. If she does this she will have enough money to pay off the mortgage and to live on without getting a job." [38] There was evidence from Mrs Miller, a niece of Mrs Tyson, that on a number of occasions Mrs Tyson had said that she had paid the mortgage off on the house and would like to be able to leave it to Mr Rush. She apparently said that she had got some advice on the matter. [39] It is clear that a substantial change in circumstances was about to happen with the death of Mr Brewer. He provided, to the extent that he could, for a life estate for Mrs Tyson. No account appears to have been taken of what would happen about the mortgage which existed on the property. It would seem clear from the evidence that the payments off the mortgage were not intended by Mrs Tyson to be for the benefit of the remainderman. The burden of her complaint, as revealed in the evidence, was that after two years only a small amount had been paid off the mortgage and she had to thereafter continue to pay off the substantial part of the mortgage. [40] The question of whether the retention of the legal estate for the benefit of the remainderman is unconscionable in the correct sense of that term can be looked at in part by seeing what may have occurred if Mrs Tyson had not taken that step of paying off the mortgage. The failure to meet the mortgage would have led to the sale of the property. The mortgagee was owed some 850 pounds plus another 135 pounds was owing for death duties on a second mortgage. That is a total of 987 pounds. The property was worth 2000 pounds at the date of death and its sale could have produced something in the order of 1000 pounds, ie $2,000. Mrs Tyson would have been entitled to the whole of the income on that investment. The investment no doubt would have been in trustee securities which would not have had the benefit of inflation. There was no power to invest, for instance, in shares or land and, accordingly, the residuary beneficiaries would expect after some forty years that they would receive an amount of something similar to that which resulted from the sale, namely, $2,000. In contrast they presently stand to receive something in excess of $470,000 being the proceeds of the sale of the land. They were only able to have the benefit of the proceeds of the sale of the land because Mrs Tyson elected to undertake the payment of a substantial part of the mortgage, in effect, close to one half of the capital cost of the land as at the date of death of Mr Brewer. [41] The other important aspect to consider in seeing whether the retention of the legal estate is unconscionable in the correct sense of that term focuses on the situation of Mrs Tyson after the death of Mr Brewer. The evidences discloses that Mrs Tyson was born in 1905. Her husband left her in 1940 and at that stage she was living at a property at 66 Lancaster Road, Dover Heights. She was not employed and on the departure of her husband she commenced to take in boarders and provide for them in order to support herself. It seems clear that when she took in Mr Brewer, as a boarder, she was still not working and was making ends meet by providing lodgings for boarders. Thereafter she and Mr Brewer moved into the property at Henley. There is evidence to show that she was not working at this time, that Mr Brewer was working as warehouseman and that he supported her. At the time of death of Mr Brewer in 1952 Mrs Tyson was 47 years of age. She was still not working and had not been in employment for many many years. The only means of support that she had, according to her recent experience, was to take in boarders, provide them with meals and accommodation and make a living in that way. It was not an uncommon circumstance. On the death of Mr Brewer she was faced with a difficult situation. The mortgage had to be met or the house would have to be sold. If the house was sold she would get nowhere near enough to support herself. She would have had to move into rented accommodation and try and obtain work which would be difficult for a woman who for many years had not worked in paid employment but who had only managed to

Page 110 support herself by taking in boarders. To this extent she was in a vulnerable situation. She had also invested 150 pounds by way of loan in the property. She had little choice but to adopt the course of paying the mortgage and taking in boarders in order to survive. Mr Rush makes it clear that for board not only did he have his accommodation but he also had meals provided by Mrs Tyson. [42] One thus has a circumstance of a vulnerable Mrs Tyson who had little alternative. In these circumstances the executor, and through her, the remaindermen had everything to gain by allowing her to pay off the mortgage. [43] It would seem to me that in those circumstances it would be unconscionable for the remaindermen, through the executor, to insist on their legal rights to the full ownership of the property on the death of Mrs Tyson and thus deny even the remedy of a lien to secure repayment of the funds provided. I am mindful in coming to this conclusion of the evidence of Mrs Tyson's knowledge of her rights and the choice which she made. She was not misled by the remaindermen or Mr Keogh and the case is thus outside the realms of that part of equity which deal with mistaken expenditure on another's property. The executor, Mr Keogh, and through him the remaindermen, sat by and allowed Mrs Tyson to provide for them about 45% of the value of the property as at the date of death of Mr Brewer. [44] It is thus necessary to turn to a consideration of what is the appropriate remedy. I have already earlier in this judgment talked of the different remedies that may be available and the difference between them. There are a number of aspects which could be taken into account in deciding whether or not to grant a remedy which gives the plaintiff the opportunity to participate in the increased value of the property over the years. These are as follows:(a) There is a clear connection between the payment of the amount off the mortgage and the ultimate retention of the property. Normally one does not now need to have had some right of ownership for there to be a remedy by way of constructive trust. (b) There are no third parties involved in this matter and such interests do not have to be considered. (c) There would be no personal remedy that the plaintiff's estate would have for the recovery of her funds. (d) There was substantial delay in the sense that Mrs Tyson although she complained about it did nothing about the fact that she had paid off the mortgages by 1965. Such delay can only work to the benefit of the remaindermen as the facts have turned out in the present case. There is no suggestion of alteration of position or detriment as far as the remaindermen are concerned. The delay was all to their advantage. (e) The remaindermen will still have the benefit of the increases due to inflation on their 55% share which they would not have achieved if Mrs Tyson had not paid off the mortgages. Order [45] It seems as a result of these factors that Mrs Tyson's estate should have the remedy of a constructive trust which gives him a proportionate share of the property to which Mrs Tyson has contributed. On the figures Mrs Tyson contributed 45% of the value of the property as it was valued at the time she commenced her repayments of the mortgage. She has also, of course, paid the interest on that mortgage but the capital share is 45%. [46] In these circumstances it seems to me that the plaintiff should have constructive trust over the funds remaining to that extent and that there should be judgment for the defendant against the plaintiff for the amount of the rates that have been paid with an appropriate set off. Given that the funds are in an account the parties should bring in short minutes of order to reflect these reasons. [47] Subject to any submissions the plaintiff should have his costs of the action. Counsel for the plaintiff: Mr W Hodgekiss Solicitors for the plaintiff: Symonds & Company

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Counsel for the defendant: Mr D Russell Solicitors for the defendant: Thorntons Solicitors

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10 of 10 DOCUMENTS: Victorian Reports/Judgments/1999 3 VR/Re PURKISS - 1999 3 VR 223 - 14 October 1999 8 pages

Re PURKISS - [1999] 3 VR 223

SUPREME COURT OF VICTORIA Warren J 22 September, 14 October 1999 [1999] VSC 0386
Trust and trustees -- Vesting order -- Land under Transfer of Land Act 1958 -- Holder of beneficial interest unable to obtain transfer -- Registered proprietor deceased -- Personal representative unable to be located -- Transfer of Land Act 1958 (No. 6399) s. 58 -- Trustee Act 1958 (No. 6401) ss. 51(2) (o), 52, 58. The registered proprietor of certain land died in 1919, leaving by her will life interests in the land to her daughters and the remainder to her five sons equally. Under the Settled Land Act 1915 one of the sons who was named as executor in the will became trustee of the land. He became registered proprietor of the land and his name remained on the register after his death in 1939. Probate of his will was granted to his widow who died in 1957. Probate of her will was granted to a trustee company which had become defunct and whose successor was not known. Between 1972 and 1992, the owner of a neighbouring property acquired all of the remainder interests in the land and, on the death of the last surviving life tenant in 1984, became beneficial owner of the land. There being no one to execute a transfer to her, she applied to the court for a vesting order under s. 51(2)(o) of the Trustee Act 1958, which empowered the court to make a vesting order where property was vested in a trustee and it appeared expedient to do so. Held, ordering that the land vested absolutely in the plaintiff: (1) Section 51(2)(o) of the Trustee Act 1958 was intended to overcome circumstances where a transaction or transfer could not be effected and it was necessary that an order be made to remedy an otherwise uncertain and unjust set of circumstances. (2) The plaintiff presented a proper case for the making of a vesting order based upon thoroughly assembled documentary evidence that she was entitled to the beneficial interest in the land to the exclusion of all other persons. She demonstrated not only the need for the relief sought by her but, in particular, that an order under s. 51 was a step of last resort, there being no other ordinary conveyancing procedure available to her. Marshall v Williams [1974] V.R. 592 followed Dotter v Evans [1969] V.R. 41; Casella v Casella [1969] V.R. 49 distinguished Originating motion This was an application upon an originating motion for a vesting order pursuant to s. 51(2) of the Trustee Act 1958 to enable the plaintiff to be registered as proprietor of land. The facts are stated in the judgment.

Page 114

R. B. Phillips for the plaintiff.

Warren J
[1] The plaintiff seeks a vesting order pursuant to s. 51 of the Trustee Act 1958. The relevant parts of ss. 51 and 52 of the Act provide: [1999] 3 VR 223 at 224
51. Vesting orders (1) The Court may make an order, in this Act called a vesting order, which shall have effect as provided in section fifty-eight of this Act. (2) A vesting order may be made in any of the following cases, namely --

4a) 4b) 2c) 2d) 2e) 2f) 1g) 1h) 1i) 1j) 1k) 1l) 1m) 1n) 1o) 1

where the Court appoints or has appointed a new trustee; where a new trustee has been appointed out of court under any statutory or express power; where a trustee retires or has retired; where a trustee is a minor; where a trustee is a patient within the meaning of the Mental Health Act 1986; where a trustee is out of the jurisdiction of the Court; where a trustee cannot be found; where a trustee being a corporation is dissolved; where a trustee neglects or refuses to convey any property, or to receive the dividends or income of any property, or to sue for or recover any property according to the direction of the person absolutely entitled to the same for twenty-eight days next after a request in writing has been made to him by the person so entitled; where it is uncertain who was the survivor of two or more trustees jointly entitled to or possessed of any property; where, as to the last trustee known to have been entitled to or possessed of any property, it is uncertain whether he is living or dead; where there is no personal representative of the last trustee who was entitled to or possessed of any property or where it is uncertain who is the personal representative of such trustee or where the personal representative of such a trustee cannot be found; where any person neglects or refuses to convey any property, or to receive the dividends or income of any property, or to sue for or recover any property in accordance with the terms of an order of the Court; where the Court might have made a vesting order if this Act had not been passed; where property is vested in a trustee and it appears to the Court to be expedient to make a vesting order. ...

52. In whom property to be vested etc. (1) Where the making of a vesting order is consequential on the appointment of a new trustee, the property shall be vested in the persons who, on the appointment, are the trustees. (2) Where the making of such order is consequential on the retirement of one or more of a number of trustees, the property may be vested in the continuing trustees alone. (3) Subject to the provisions of sub-section (1) of this section, a vesting order may vest the property in any such person in any such manner and for any such estate or interest as the Court may direct, or may release or dispose of any contingent right to such person as the Court may direct. (4) The fact that a vesting order is founded or purports to be founded on an allegation of the existence of any of the

Page 115
matters mentioned or referred to in section fifty-one of this Act shall be conclusive evidence of the matter so alleged in any Court upon any question as to the validity of the order. ...

Section 58 of the Trustee Act provides:

58. Effect of vesting order (1) In the case of a vesting order consequential on the appointment of a new trustee, or the retirement of a trustee, the vesting order shall have the same effect as if the persons who before the appointment or retirement were the trustees (if any) had duly [1999] 3 VR 223 at 225 executed all proper conveyances of the property for such estate or interest as the Court directs, or if there is no such person, or no such person of full capacity, then as if such person had existed and been of full capacity, and had duly executed all proper conveyances of the property for such estate or interest as the court directs. (2) In every other case the vesting order shall have the same effect as if the trustee or other person or description or class of persons to whose rights, or supposed rights, the provisions of this Part respectively relate, had been an ascertained and existing person of full capacity, and had executed a conveyance or release to the effect intended by the order. (3) In the case of land subject to the operation of the Transfer of Land Act 1958 the land shall not vest until the appropriate recordings are made in accordance with the provisions of that Act. (4) In the following cases the vesting order shall vest in the person named in the order the right to transfer or call for a transfer of the property or security, that is to say, in the case of --

5a) 5b)
...

any property that does not come within sub-section (3), but a transfer of which is required to be registered by or under any Act, whether of this State or otherwise; any security that is only transferable in books kept by a corporation company or other body, or in manner directed by or under any Act, whether of this State or otherwise.

(6) The person in whom the right to transfer or call for the transfer of any property or security is so vested may transfer the property or security to himself or any other person according to the order, and all corporations companies associations and persons shall obey the order.

[2] The application relates to land at 27 Eliza Street, Black Rock being the land described in certificate of title vol. 3168 folio 418 ("the property"). Erected on the property was a small weatherboard house. Its condition was old and its interior lighting was provided by way of gas. Over the years the house deteriorated and it was eventually condemned by the local council in 1993 when it was demolished. [3] The property fronts Eliza Street, Black Rock. At the rear of the property there is a strip of land about 21 feet deep which fronts onto Potter Street. The plaintiff lives directly opposite the strip of land at 23 Potter Street, Black Rock and has lived at that property since 1936, a period of over 60 years. The plaintiff was married to Ernest George Purkiss. His family purchased 23 Potter Street, Black Rock in 1918. [4] The chain or history of the property is that on 9 November 1914 one Martha Walton was registered as proprietor of the property. On 17 May 1919 Martha Walton died leaving a will dated 21 April 1919 whereby the deceased left a life interest in the property to her husband, Christopher Samuel Walton and on his death a life interest to her daughters and the remainder interest to her five sons equally, Sydney Arthur Walton, Christopher Samuel Walton, William John Walton, Horace Lewis Walton and Herbert Henry Walton. Christopher Samuel Walton (the son) was granted probate of the will of Martha Walton deceased on 21 July 1919. The son was appointed executor under the will but not trustee. The deceased did not appoint any trustee. On 15 September 1919 Christopher Samuel Walton (the son) was registered as proprietor of the property in his capacity as executor of the estate of Martha Walton. [5] Christopher Samuel Walton, the son and executor of the estate, died on 15 March 1939. Pursuant to the terms of the will of Martha Walton a life interest [1999] 3 VR 223 at 226

Page 116 in the property was created in favour of her three daughters, Eva Jane Walton, Orwell May Johnson and Violet Daphne Bowden. Eva Jane Walton died on 26 March 1942, Orwell May Johnson died on 26 September 1956 and Violet Daphne Bowden died on 20 October 1984. The latter daughter lived in the house previously erected on the property until her death in 1984. [6] The plaintiff and her husband set about purchasing the interests in remainder of each of the five sons of Martha Walton deceased from about 1972. I was not informed why this course was embarked upon but presumably it was for investment purposes. In any event the reason is not relevant. On 13 December 1972 the plaintiff and her husband purchased the one-fifth residuary share in remainder held by each of Herbert Henry Walton and Horace Lewis Walton, both being sons of the deceased. On 13 December 1972, also, the plaintiff and her husband purchased the respective shares of the children of William John Walton in his onefifth residuary share in remainder in the property. William John Walton was one of the five sons of Martha Walton deceased. He died on 11 October 1958. William John Walton left his estate to his three children who were the transferors of the interest in the property to the plaintiff and her husband. [7] Sydney Arthur Walton a son of Martha Walton deceased died intestate on 16 July 1936 and was survived by his widow and four children. The widow died intestate on 25 April 1942. On 15 February 1974 a son of Sydney Arthur Walton was granted letters of administration of the estates of both Sydney Arthur Walton and the widow. On 1 April 1974 the plaintiff and her husband purchased the one-fifth residuary share in remainder of Sydney Arthur Walton from the administrator of his estate and the administrator of the estate of his widow. [8] On 10 April 1975 the plaintiff and her husband purchased the one-fifth residuary share in remainder of Christopher Samuel Walton the son of Martha Walton deceased. Christopher Samuel Walton had died on 31 July 1947 and left his estate to his widow. The widow in turn died on 17 January 1957 and left her estate to two charities and which charities in turn transferred their residuary interest in remainder to the plaintiff and her husband. Hence, by 1975 the plaintiff and her husband had acquired the remainder interests of each of the five sons of Martha Walton deceased in the property. [9] The husband of the plaintiff, Ernest George Purkiss, died on 4 January 1976 and the executor of the estate of the husband executed a transfer of land to the plaintiff on 1 November 1992 in respect of the interest of the husband in the property. [10] The plaintiff has paid all rates and charges on the property. She has sought a vesting order from the Registrar of Titles and who has declined to make an order pending an order from this court. If this court makes an order under s. 51 of the Trustee Act the Registrar of Titles would have power under s. 58 of the Transfer of Land Act 1958 to record the order of this court in the register. Section 58 of the Transfer of Land Act provides:
58. Registrar to give effect to order vesting trust estate (1) Whenever any person interested in land under the operation of this Act appears to any court of competent jurisdiction or to the Registrar to be a trustee of such land within the intent and meaning of any Act relating to trustees and any vesting order is made in the premises by any such court or by the Registrar (which order he is hereby empowered to make concurrently with the Court), the Registrar on making or being served with such order or an office copy thereof shall make a recording of the order in any relevant part of the Register. [1999] 3 VR 223 at 227 (2) Until a recording is made as aforesaid no vesting order referred to in this section shall have any effect or operation in transferring or otherwise vesting the land.

[11] The difficulty faced by the plaintiff is that there is no person currently able to effect a transfer of the property to the plaintiff. A related difficulty was considered by Gillard J. in Marshall v Williams [1974] V.R. 592 where purchasers under a terms contract for the sale of land had paid the full amount of the purchase moneys but were unable to obtain from the vendor, who could not be located, the duplicate certificate of title to or a registrable transfer of the land. The learned judge observed (at 593) that upon the full execution of the contract the registered proprietor was a bare trustee of the relevant property. The learned judge referred, also, to leading English authorities on the effect of a contract of sale of land,

Page 117 Holroyd v Marshall (1863) 10 H.L.C. 191 at 209; 11 E.R. 999 at 1006 and Lysaght v Edwards (1876) 2 Ch. D. 499, and observed at 593-4:
In the former case at p. 209, Lord Westbury, LC, said: "In equity it is not necessary for the alienation of property that there should be a formal deed of conveyance. A contract for valuable consideration by which it is agreed to make a present transfer of property passes at once the beneficial interest, provided the contract is one which a Court of Equity will decree specific performance. In the language of Lord Hardwicke, the vendor becomes a trustee for the vendee, subject of course to the contract being one to be specifically performed." In the second authority, Sir George Jessel, MR put it in this way, at p. 506: "What is the effect of a contract? It appears to me that the effect of a contract of sale has been settled for more than two centuries. Certainly it was completely settled before the time of Lord Hardwicke, who speaks of the settled doctrine of the Court as to it. What is that doctrine? It is the moment you have a valid contract for sale, the vendor becomes in equity a trustee for the purchase of the estate sold and the beneficial ownership passes to the purchaser, the vendor having a right to the purchase money, a charge or lien on the estate for the security of that purchase money and a right to retain possession of the estate until the purchase money is paid, in the absence of express contract as to the time of delivering possession. In other words, the possession of the vendor is something between what has been called a naked or bare trustee or a mere trustee, that is a person without beneficial interest, and a mortgagee who is not in equity anymore than a vendor the owner of the estate, but is in certain events entitled to what the unpaid vendor is, viz. possession of the estate and a charge upon the estate for the purchase money."

[12] As a consequence, in Marshall v Williams it was held that after the payment of the balance of the purchase money by the purchasers the vendor/registered proprietor no longer held any beneficial interest in the property and held the legal estate as trustee for the purchasers and who were entitled to apply for a vesting order under the provisions of s. 51 of the Trustee Act 1958. [13] Upon the death of Martha Walton the property became settled land as a result of the life tenancies granted under the will of Martha Walton to each of her daughters. Further, by virtue of the Settled Land Act 1915 Christopher Samuel Walton the son as executor under the will became trustee of the property. The property ceased to be subject to the settlement created by the will upon the death of the last life tenant in October 1984. Further, Christopher Samuel Walton the son and any other person thereafter ceased to be or entitled to be appointed trustee of the property. Hence, the plaintiff cannot seek relief from the court under the current applicable statute, that is, s. 36 of the Settled Land Act 1958 to be appointed a trustee of the settlement under the will of Martha Walton and thereby execute a transfer of the property to herself as a purchaser for value of the interests in remainder. [14] Upon probate of the will of Martha Walton being granted to Christopher [1999] 3 VR 223 at 228 Samuel Walton the son the property vested in him in trust pursuant to s. 9 of the Administration and Probate Act 1915. Accordingly, he was registered on the title of the property in his capacity as executor and remained so registered. The question arises, therefore, whether the plaintiff could prevail upon the last surviving proving executor in the chain of representation from Christopher Samuel Walton the son pursuant to the current applicable statute, the Administration and Probate Act 1958. Section 17 of the Administration and Probate Act might permit the last surviving proving executor in the chain of representation from Christopher Samuel Walton the son to stand as executor of the will of Martha Walton. Section 17(2) requires that in such circumstances the chain of representation remain unbroken and which chain is broken by an intestacy, a failure to appoint an executor or the failure to obtain probate of a will. [15] In this matter probate of the will of Christopher Samuel Walton the son was granted to his widow on 22 September 1947 in the Supreme Court of New South Wales. The widow died on 17 January 1957 and probate of her will was granted in the Supreme Court of New South Wales to a trustee company that no longer exists (but presumably has a successor in title). The plaintiff has not provided evidence concerning the grant of probate of the will of the widow of Christopher Samuel Walton the son. Nevertheless, I can be satisfied in the prevailing circumstances of the history of the property that whilst it might be argued that the plaintiff could seek to have the executor of the will of the widow of Christopher Samuel Walton the son stand as executor of the will and trustee of the estate of Martha Walton and thereby the property it would be a course that is cumbersome and fraught with continuing uncertainty. The plaintiff is herself now elderly and in my view it is desirable that the uncertain status of the property ought be resolved by way of the most

Page 118 expeditious course. In my view s. 51(2)(o) provides such a course. [16] When contrasted with s. 17 of the Administration and Probate Act, s. 51 of the Trustee Act provides a more convenient solution to the problem at hand. The scheme of the vesting provisions of the Trustee Act is to enable the court to make a vesting order to overcome difficulties that arise in the circumstances listed in s. 51(2). The underlying purpose of the vesting provisions must be to ensure that a trust can achieve the purpose for which it was created and that those persons entitled to an interest pursuant to or as a result of a trust can receive the benefit or interest to which they are so entitled. [17] The circumstances of the present matter fall readily within the ambit of circumstances contemplated by s. 51(2)(o) of the Trustee Act. In essence, the relevant circumstances are that the property was held on trust by Christopher Samuel Walton the son who has since died and there is no other person reasonably available to execute a transfer or be appointed as trustee in his stead. The plaintiff has demonstrated that she is entitled to the beneficial interest in the property to the exclusion of all other persons. It is expedient, therefore, to make a vesting order. Section 51(2)(o) of the Trustee Act is a "catch-all" provision. In my view s. 51(2)(o) of the Trustee Act is a provision that is intended to overcome circumstances where a transaction or transfer cannot be effected and it is necessary that an order be made to remedy an otherwise uncertain and unjust set of circumstances. [18] The courts have demonstrated a reluctance to make vesting orders where the procedure is used "to facilitate or be a substitute for ordinary conveyancing practice": Dotter v Evans [1969] V.R. 41. In Casella v Casella [1969] V.R. 49 the court declined to make a vesting order where a husband refused to obey an [1999] 3 VR 223 at 229 order to transfer a house to his wife. McInerney J. said (at 59) that the court should not make an order "until every other means has been exhausted of securing the production of the duplicate certificates of title now held by or at the direction of the respondent". Such approach was initially adopted by Gillard J. in Dotter v Evans and followed later in Marshall v Williams at 594 where the learned judge observed:
Having regard therefore to these well-established principles of equity, at all times material after the balance of purchase money was paid by Mr. and Mrs. Marshall, Mr. Williams no longer had any beneficial interest in the property and he held the legal estate as trustee for Mr. and Mrs. Marshall. Accordingly, Mr. and Mrs. Marshall were entitled to come to the court and apply for a vesting order under the provisions of s. 51 of the Trustee Act 1958. My brother McInerney in Casella v Casella [1969] V.R. 49, and myself in Dotter v Evans, [1969] V.R. 41, have indicated the reluctance of a court to make a vesting order in circumstances such as these until such time as all curial and conveyancing processes have been exhausted to obtain the due registration of the applicants' interest under the Transfer of Land Act.

[19] As observed by the authors Ford and Lee in Principles of the Law of Trusts, the general approach of the courts to an application for a vesting order will depend: "[t]o some extent on the propriety of the case before it, the assiduity with which the evidence, including any documentary evidence has been assembled and the need for the relief sought". Analogous circumstances were considered by Cussen A.C.J. in Re Jenkin [1932] V.L.R. 314. In that matter three persons constituted the tenant for life of settled land and with the consent of the trustee sold the land on a terms contract. Two of the persons constituting the tenant for life died and when the time came for conveyance of the land the persons then constituting the tenants for life were numerous and in part undetermined. The court on the application of the survivor of the original vendors made an order giving leave to the trustee of the settlement with the consent of the applicant to convey the land in accordance with the contract. It was submitted on behalf of the applicant that by virtue of the combined effect of the provisions of the Settled Land Act 1928 and the Trustee Act 1928 the court ought make the orders it ultimately did. [20] Section 52(4) of the Trustee Act provides that a vesting order is founded on an allegation of the existence of certain matters and is deemed to be conclusive evidence of the matters so alleged. Obviously the policy or purpose underlying the provision is that if it were otherwise and a vesting order was held to be invalid on the basis that the court made an order based upon an erroneous belief difficulties would arise in relation to any transaction entered into after and as a consequence of the vesting order such as a transfer of

Page 119 land entered into in reliance upon such vesting order. As a consequence, the court insists upon clear and satisfactory evidence of the factual basis upon which the vesting order is sought: Re Hayward's Settlement (1884) 10 V.L.R. (E.) 38. [21] I am satisfied in the present matter that the plaintiff presents a proper case for the making of a vesting order based upon thoroughly assembled documentary evidence. Furthermore, I am satisfied that the plaintiff has demonstrated not only the need for the relief sought by her, but in particular, that an order by the court under s. 51 of the Trustee Act is a step of last resort, the plaintiff having no other ordinary conveyancing procedure available to her. [22] The remaining matter to be considered is whether or not there was a necessary defendant who ought have been joined to the proceeding. The only defendant [1999] 3 VR 223 at 230 would have been the Registrar of Titles. The purpose for so joining the registrar would be merely for the purposes of form and regularity. It has been held that where the joining of the Registrar of Titles as a party to an application for a vesting order was only for the purpose of giving a "spurious appearance of regularity to the proceedings" such joinder is unnecessary: Chang v Registrar of Titles (1976) 137 C.L.R. 177 at 188; see also Ex parte C.R.A. Exploration Pty. Ltd. [1983] 1 Qd. R. 310. I consider that the same approach should be adopted in this proceeding. [23] In light of these matters I consider it is appropriate that orders be made as sought by the plaintiff pursuant to s. 51(2) of the Trustee Act that the freehold and beneficial interest in the property is vested in the plaintiff absolutely. Order accordingly. Solicitors for the plaintiff: Raleigh & Associates. K. R. REES BARRISTER-AT-LAW

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