Chapter 8. Amendment of [Property Law Act 1974]
Updates and background for this project (Digest)
8.1 The provisions in this Chapter set out the model survivorship provisions. They deal with a situation where two or more people die, or are presumed dead, in circumstances where the order of their deaths is uncertain and the order of death must be established to resolve the question of the transmission of property to and from their respective estates.
8.2 These provisions are relevant not only to the disposition of property under a will or upon an intestacy, but also to dispositions of property under other instruments that operate upon death. The National Committee has, therefore, decided that the broader application of these provisions justifies their inclusion in legislation relating to property law generally, rather than in a statute that deals only with the administration of deceased estates.1
8.3 This model legislation is based upon the existing statutory arrangements in Queensland, so this chapter is framed as an amendment of the Property Law Act 1974 (Qld). The most appropriate statute in NSW for these provisions is the Conveyancing Act 1919 (NSW).
8.4 The provisions in this Chapter essentially replace the seniority rule so that, in cases where two or more people die or are presumed dead in circumstances that give rise to a reasonable doubt as to survivorship, the law will no longer presume that the younger survived the older, except as a presumption of last resort. The National Committee has decided to replace the seniority rule with the scheme outlined below because the seniority rule was seen as arbitrary and, in the case of wills, as not reflecting the probable wishes of the testator.2
800 Act amended
This chapter amends [insert local equivalent of the Property Law Act 1974 (Qld)].
801 Insertion of new [pt 19A]
8.5 In NSW, s 35 of the Conveyancing Act 1919 (NSW) currently deals with the presumption of survivorship. The NSW provisions of this Part of the model legislation will, therefore, most likely be expressed as a new division in Part 2 of the Conveyancing Act 1919 (NSW) which deals with general rules affecting property.
‘344A Definitions for [pt 19A]
‘In this part—
issue, of a deceased person, includes a person—
(a) who is born after a period of gestation in the uterus that commenced before the deceased’s death; and
(b) who survives for at least 30 days after the birth.
property includes real and personal property and any estate or interest in the property and any thing in action and any other right.
this jurisdiction means [Queensland].
Drafter’s note: This definition may be unnecessary in some jurisdictions. See, for example, the definition property in the Acts Interpretation Act 1954 (Qld), s 36.
8.6 The definition of “property” is intended to make it clear that it includes both legal and equitable interests in property.3 It may be unnecessary in NSW since the Interpretation Act 1987 (NSW) defines “property” to mean “any legal or equitable estate or interest (whether present or future and whether vested or contingent) in real or personal property of any description, including money, and includes things in action”.4
‘344B Relationships
‘For this part—
(a) an adopted child is to be regarded as a child of the adoptive parent or parents; and
(b) the child’s family relationships are to be decided accordingly; and
(c) family relationships that exist as a matter of biological fact, and are not consistent with the relationship created by adoption, are to be ignored.
8.7 This proposed section is based on cl 103(1) of the model legislation.5
‘344C Application of [pt 19A]
‘(1) This part applies if, after the commencement of this part—
‘(2) This part applies in relation to—
(a) all property that devolves on the death or presumed death of a person under this or another Act or law of this jurisdiction; and
Drafter’s note: Under the Acts Interpretation Act 1954 (Qld), s 6(2), a reference to ‘an Act’ includes the Act in which the reference occurs.
(b) all appointments of trustees that are made under an Act or law of this jurisdiction.
‘(3) For this part, a person is presumed to be dead if, on application to a court of competent jurisdiction of the Commonwealth or a State [or Territory], the court—
(a) declares that the common law presumption of death is satisfied; or
(b) having regard to the circumstances of the person’s disappearance, infers that the person has died.
‘(4) For this part, it does not matter whether the deaths or presumed deaths happen in this jurisdiction or elsewhere.
8.8 This proposed section sets out the circumstances where the survivorship provisions in this Part apply.
8.9 Proposed s 344C(1) states that this Part applies where the circumstances surrounding the relevant deaths raise “reasonable doubts” about the order in which the deaths occurred. The National Committee chose the expression “reasonable doubt” from the relevant Northern Territory provisions6 in preference to other formulations that refer to uncertainty in the order of survival, including the one in NSW.7 The National Committee considered that the expression “uncertain” has led to “considerable litigation” resulting in “quite different interpretations”.8
8.10 The reference to two or more people dying at the “same time” derives from s 120 of the Property Law Act 1969 (WA).9
8.11 This provision follows the relevant Northern Territory provisions10 in applying not only to people who have died, but also to people who are presumed to have died. The concept of presumption of death is elaborated in proposed s 344C(3).11 No other Australian jurisdiction has such a provision. The National Committee supported the extension of the model survivorship provisions to apply to presumed deaths because of the importance of dealing “comprehensively with the various situations in which the issue of survivorship can arise”.12 The National Committee was of the view that the traditional reluctance of courts to apply the seniority rule in cases where there is a presumed death13 could be overcome by the fact that the seniority rule would apply only as a last resort under these model provisions.14
8.12 Proposed s 344C(1) also provides that this Part applies only to cases where the deaths occur or are presumed after its commencement. The National Committee considered it important to specify this since, in many cases, these provisions will alter the way in which property devolves.15
8.13 Proposed s 344C(2) is based on s 214(1) of the Law of Property Act (NT) and s 119(1) of the Property Law Act 1969 (WA).
8.14 Proposed s 344C(3) clarifies that a person is presumed to be dead for the purposes of this Part if the Court is satisfied the person has died according to the common law presumption of death or infers, from the circumstances, that the person has died.
8.15 Proposed s 344C(4) is based on the latter part of s 214(2) of the Law of Property Act (NT) and s 119(2) of the Property Law Act 1969 (WA).
‘344D General rule
8.16 This proposed section sets out the general rule for survivorship, namely, that a deceased person’s property is to devolve as if he or she survived the other deceased person and died immediately afterwards.
8.17 Proposed s 344D(1) is generally based on s 216(2)(a) of the Law of Property Act (NT) and s 120(a) of the Property Law Act 1969 (WA). The effect of this provision is largely achieved already in NSW by the operation of the 30 day survivorship rule that applies to wills so that, to inherit, beneficiaries must survive the testator by 30 days,16 and will be achieved by a similar provision requiring intestacy beneficiaries to survive the intestate by 30 days.17 The National Committee, however, considered it desirable to have the various provisions dealing with reasonable doubt as to survivorship together, otherwise, the effect of the 30 day rule in a particular situation may be overlooked.18
8.18 Proposed s 344D(2) states that the devolution of property under s 344D(1) is subject to a contrary intention in the deceased’s will. It is based on the relevant part of s 120(a) of the Property Law Act 1969 (WA). This is consistent with the NSW provision applying the 30 day survivorship rule to beneficiaries under a will, where the general rule is subject to the expression of a contrary intention in the will.19
8.19 Proposed s 344D(3) includes property over which one of the deceased held a power of appointment within the definition of property. The National Committee concluded that the existing WA and NT provisions on which the model provision is based would not resolve the issue of survivorship as between the holder of a power of appointment and the appointee.20 The National Committee’s view was that “the principle that underlies the general rule... should also apply to the devolution of property that is the subject of a power of appointment”.21
‘344E Particular provision for substitutional dispositions
8.20 The general rule in proposed s 344D deals adequately with the entitlements of a substitutionary beneficiary (B), for example, where the testator gives property to A but, if A dies before the testator, then to B, where the testator and A die, or are presumed to have died, in circumstances giving rise to a reasonable doubt about the order of survival. However, this proposed section deals with circumstances where the reasonable doubt about survival arises not with respect to the testator and one beneficiary (A) but where the doubt arises with respect to two or more beneficiaries. For example, where the testator leaves a life estate to A with the remainder to B if B survives A, but otherwise to C, and A and B die in circumstances giving rise to reasonable doubt about the order of survival.22 In such circumstances, the general rule in proposed s 344D will not assist the substitutionary beneficiary (C) who will not be able to prove the facts that would support his or her entitlement. The National Committee’s view was that the model legislation should give effect to substitutional dispositions of this kind.23
8.21 This proposed section, therefore, applies so that the substitute beneficiary (C) can take because the possible beneficiary (B) is taken not to have survived the specified person (A). This provision, which is based on an option considered by the Law Reform Committee of SA,24 applies only to the substitute beneficiary and, therefore, avoids the possibility of the general rule in proposed s 344D applying at the same time.25
8.22 Proposed s 344E(2) allows this provision to be applied to a chain of substitute beneficiaries.26
8.23 Proposed s 344E(3) provides that the section does not apply if a contrary intention is expressed in the will, trust or other disposition.27
‘344F Gifts made in contemplation of the donor’s death
‘(1) A gift made in contemplation of death by any of the persons to another of the persons is of no effect.
‘(2) In subsection (1)—
gift made in contemplation of death means a gift known in law as a donatio mortis causa.
8.24 This proposed section renders a gift made in contemplation of death (sometimes known as a donatio mortis causa)28 of no effect, if the donor and the intended recipient both die, or are presumed to have died, in circumstances giving rise to a reasonable doubt about the order of survival. This means that the property, which will usually already have been in the possession of the intended recipient,29 will pass instead to the deceased donor’s estate. It derives from s 216(2)(b) of the Law of Property Act (NT) and s 120(b) of the Property Law Act 1969 (WA).
8.25 A person only becomes entitled to property that is given in contemplation of death if he or she survives the donor. The National Committee concluded that it is consistent with this characteristic of a donatio mortis causa that the gift should be of no effect if it is uncertain whether or not the intended recipient survived the donor.30
‘344G Insurance moneys
8.26 This proposed section deals with the situation where a person is insured under a policy of life or accident insurance and the person or people who would benefit from the policy die, or are presumed to have died, in circumstances which give rise to a reasonable doubt as to the order of survival. In such a case, the proceeds are to be distributed as if the insured person had survived the others and had died immediately afterwards. It is based on s 216(2)(c) of the Law of Property Act (NT) and s 120(c) of the Property Law Act 1969 (WA).31
8.27 The National Committee considered it appropriate that the proceeds of the policy should be paid as though the insured had survived the intended beneficiaries because, in the circumstances outlined above, the intended beneficiaries can never benefit personally from the insurance proceeds.32
8.28 Proposed s 344G(3) follows the approach taken in Western Australia by making the provision subject to a contrary intention appearing in the instruments governing the distribution of the proceeds of the policy.33
‘344H Joint property
‘Any property that is owned jointly and exclusively by any 2 or more of the persons is to devolve as if it were owned by them as tenants in common in equal shares when they died.
8.29 This proposed section provides that when two or more owners of jointly held property die or are presumed dead in circumstances giving rise to a reasonable doubt as to the order of survival, the property is to devolve as if the owners were tenants in common in equal shares when they died. This changes the usual situation with respect to jointly held property, namely, that the property devolves to the surviving joint tenants. It is based on s 216(2)(d) of the Law of Property Act (NT) and s 120(d) of the Property Law Act 1969 (WA).34
8.30 In recommending this provision, the National Committee was of the view that it provides a “more equitable basis for the distribution of property than the seniority rule”.35
‘344I Gifts to survivor of identified beneficiaries
‘(1) This section applies if, under a will, trust or other disposition, property would have devolved or passed, whether by operation of statute or otherwise, to any of 2 or more possible beneficiaries, who are from among the persons who die or are presumed dead, if any of the possible beneficiaries could be shown to have survived the other or others of them.
‘(2) The disposition takes effect as if the property were given to the possible beneficiaries as tenants in common in equal shares.
‘(3) Subsection (2) is subject to a contrary intention appearing in the will, trust or other disposition.
‘(4) Subsection (2) does not apply if section 344G or 344J applies.
8.31 This proposed section deals with situations where property is left to the survivor of two or more identified beneficiaries and those beneficiaries die, or are presumed to have died, in circumstances giving rise to a reasonable doubt as to the order of survival. In such circumstances, the property devolves to the estates of the beneficiaries as if it were given to the beneficiaries as tenants in common in equal shares. It is based on s 216(2)(e) of the Law of Property Act (NT) and s 120(e) of the Property Law Act 1969 (WA).36
8.32 An example of the application of this provision can be seen in a scenario where a testator leaves property on trust to pay income to A, B and C in equal shares during their lives and A, B and C die, or are presumed to have died, in circumstances giving rise to a reasonable doubt as to the order of survival. In this case, the property will pass in equal shares to the estates of A, B and C.
8.33 The National Committee considered that such a provision “produces a more equitable result than the application of the seniority rule”.37
8.34 Proposed s 344I(4) provides that this proposed section does not apply if the distribution of life insurance proceeds (under proposed s 344G) applies to the situation. It also provides that it does not apply if the circumstances involve property that is subject of a power of appointment on the survivor of two or more people (under proposed s 344J).
‘344J Property the subject of a power of appointment
‘(1) This section applies if a power of appointment could have been exercised over property, whether by operation of statute or otherwise, by any 2 or more of the persons who die or are presumed dead if any of them could be shown to have survived the other or others of them.
‘(2) The power of appointment may be exercised as if—
‘(3) If a person mentioned in subsection (2)(b) does not exercise the power of appointment over his or her appointable property, the appointable property is to devolve in the way in which the property would have devolved if the person had survived the other or others but not exercised the power of appointment.
‘(4) Subsections (2) and (3) are subject to a contrary intention appearing in the instrument creating the power of appointment.
‘(5) Subsections (2) and (3) do not apply if section 344G applies.
8.35 This proposed section deals with the devolution of property where a power of appointment is conferred on the survivor of two or more people and those people die, or are presumed to have died, in circumstances giving rise to a reasonable doubt about the order of survival. The proposed section treats each of the deceased as having had a power of appointment over an equal share of the property. If any of the deceased donees of the power fails to exercise the power, the share of the property will devolve in the same way as it would if the person had survived the other potential donees. It derives from s 216(2)(f) of the Law of Property Act (NT) and s 120(f) Property Law Act 1969 (WA).38 The National Committee considered that a provision of this kind resolves the question of survivorship as between the potential donees of the power of appointment and “produces a fair result”.39
8.36 The phrase “whether by operation of statue or otherwise” in proposed s 344J(1) follows a similar provision in proposed s 344I and is intended to state that the provision applies where the survivor of any two or more people could have exercised the power of appointment, “whether by operation of the relevant anti-lapse provision or otherwise”.40 In NSW, the relevant anti-lapse provision is contained in s 41 of the Succession Act 2006 (NSW).41 The National Committee considered it important that the model provision make it clear that it will apply whether the survivor entitled to exercise the power of appointment is directly identified as a potential donee of the power or whether the survivor is a potential donee because of the operation of the relevant anti-lapse provision.42
8.37 Proposed s 344J(5) states that this provision does not apply if the provision relating to the distribution of life insurance proceeds43 applies in the circumstances.
‘344K Property left to survivor of 2 or more of testator’s issue
8.38 This provision applies, for example,44 where a testator make a disposition to the survivor of his or her children and the last survivors of those children (being two or more) die, or are presumed to have died, in circumstances giving rise to a reasonable doubt as to the order of survival. In such circumstances, without this provision, the operation of the anti-lapse rule in s 41 of the Succession Act 2006 (NSW), combined with the seniority rule would result in the disposition going to the issue of the youngest surviving child. However, if the youngest surviving child to die does not have any issue, the disposition simply lapses and the issue of the older children are ignored. This provision, therefore, ensures that, in such circumstances, the issue of all of the remaining survivors will take, in equal shares, their parents’ equal shares. It applies only to situations where the anti-lapse provision operates to prevent the lapsing of a disposition to surviving issue of the testator. Proposed s 344I and proposed s 344J deal with situations where the will adequately deals with the question of survivorship.45
8.39 This provision is based on s 216(2)(g) of the Law of Property Act (NT) and s 120(g) of the Property Law Act 1969 (WA). The National Committee, in recommending such a provision, agreed with the policy underlying the NT and WA provisions.46 The National Committee also observed that such provisions “ensure that the anti-lapse provisions... operate to the maximum benefit of any issue of the deceased beneficiaries”.47
8.40 The requirement that the issue must survive the testator by 30 days in proposed s 344K(2) has been included for consistency with the relevant anti-lapse provision.48
‘344L Application of rules if testator and issue die or are presumed dead
‘(1) This section applies if the persons who die or are presumed dead include a testator and 1 or more of his or her issue.
‘(2) For the purpose of [insert local equivalent of the Succession Act 1981 (Qld), section 33N], the testator is taken to have survived all of his or her issue who die or are presumed dead and to have died immediately afterwards.
Drafter’s note: For jurisdictions that do not yet have the equivalent of s 40 of the model Wills Bill, an adjustment may be needed. See 23.235 in the Law Reform Report.
‘(3) Subsection (2) is subject to a contrary intention appearing in the will.
8.41 This provision deals with a situation where the anti-lapse provision49 applies and the testator and beneficiaries die or are presumed to have died in circumstances giving rise to a reasonable doubt as to the order of survival, by making it clear that the testator is taken to have survived all of his or her issue who have died or are presumed dead and to have died immediately afterwards.
8.42 This provision is based on s 216(2)(h) of the Law of Property Act (NT) and s 120(h) of the Property Law Act 1969 (WA).50 However, the National Committee decided not to include provisions based on the parts of the NT and WA provisions that state that a testator’s disposition to any of his or her issue who die in the circumstances of uncertainty or are already dead lapses unless those issue left issue who survive the testator and these surviving issue take in accordance with the relevant anti-lapse provision. The reason for this decision was that it was not necessary to state the results of the provision since the results followed from the combined effect of the doctrine of lapse and model anti-lapse provision.51
‘344M Presumption of last resort
8.43 This provision sets up the seniority rule as a presumption of last resort to cover those circumstances that are not covered by proposed s 344D-344L. Therefore, in such circumstances, the younger will be deemed to have survived the elder.
8.44 It is based on s 217 of the Law of Property Act (NT) and s 120(i) of the Property Law Act 1969 (WA).52
8.45 The National Committee considered that, while the seniority rule is liable to criticism for arbitrary results and not reflecting the testator’s probable intentions, these criticisms apply to it as a primary rule for determining issues of survivorship. The same criticisms do not apply to it as a rule of last resort, when it is intended to produce an actual result in terms of survival with respect to the rare circumstances where proposed s 344D-344L do not apply.53 The National Committee observed that, without such a provision, there might be circumstances where the question of survivorship could be “incapable of resolution on the available evidence”.54
‘344N Re Benjamin orders
‘Nothing in this part prevents the distribution of the estate of a deceased person if a beneficiary can not be found and there is no evidence that the beneficiary predeceased the testator.
Note—
See Re Benjamin [1902] 1 Ch 723.’.
8.46 This provision preserves the Court’s power to make a Re Benjamin order, which allows a personal representative to distribute an estate on the basis that a beneficiary who cannot be located did not survive the deceased. Such an order protects a personal representative from liability with respect to any distribution made under it in the event that it transpires that the beneficiary in fact survived the deceased.55 The provision is based on s 218 of the Law of Property Act (NT), but also includes a reference to the case from which the order derived its name.56
8.47 By flagging the existence of Re Benjamin orders, this provision addresses concerns that their availability may not be widely known.57 In recommending this provision, the National Committee rejected proposals to restate the Court’s power to make Re Benjamin orders, or even extend their availability.58
FOOTNOTES
1. Queensland Law Reform Commission, Administration of Estates of Deceased Persons: Report of the National Committee for Uniform Succession Laws to the Standing Committee of Attorneys General, Report 65 (2009) (“QLRC, Report 65”) [23.341].
2. QLRC, Report 65 [23.22]-[23.24].
3. QLRC, Report 65 [23.160].
4. Interpretation Act 1987 (NSW) s 21(1).
5. See para 1.3-1.4.
6. Law of Property Act (NT) s 216(2) and s 217(b).
7. Conveyancing Act 1919 (NSW) s 35.
8. QLRC, Report 65 [23.279]. The National Committee was of the view that the NT formulation is based on a judgment of Lord Macmillan in Hickman v Peacey [1945] AC 304, 323-325: QLRC, Report 65 [23.276].
9. See also Civil Law (Property) Act 2006 (ACT) s 213 and Administration and Probate Act 1929 (ACT) s 49P and s 49Q.
10. Law of Property Act (NT) s 216 and s 217.
11. See para 8.14.
12. QLRC, Report 65 [23.291].
13. See, eg, Re Albert [1967] VR 875, 879-880.
14. QLRC, Report 65 [23.292]-[23.293]. See proposed s 344D and s 344M; para 8.43-8.45.
15. QLRC, Report 65 [23.334].
16. Succession Act 2006 (NSW) s 35.
17. Proposed s 107 of the Succession Act 2006 (NSW) inserted by the not yet commenced Succession Amendment (Intestacy) Act 2009 (NSW) sch 1.
18. QLRC, Report 65 [23.77].
19. Succession Act 2006 (NSW) s 35(2).
20. QLRC, Report 65 [23.81].
21. QLRC, Report 65 [23.83].
22. See Law Reform Committee of SA, Problems of Proof of Survivorship as Between Two or More Persons Dying at About the Same Time in One Accident, Report 88 (1985) 17-18.
23. QLRC, Report 65 [23.104].
24. Law Reform Committee of SA, Problems of Proof of Survivorship as Between Two or More Persons Dying at About the Same Time in One Accident, Report 88 (1985) 22.
25. QLRC, Report 65 [23.107].
26. QLRC, Report 65 [23.110]-[23.111].
27. QLRC, Report 65 [23.265].
28. See para 5.23.
29. Or the intended recipient will have the means of possessing it.
30. QLRC, Report 65 [23.122]-[23.123].
31. QLRC, Report 65 [23.133].
32. QLRC, Report 65 [23.134].
33. QLRC, Report 65 [23.263].
34. QLRC, Report 65 [23.158].
35. QLRC, Report 65 [23.157].
36. QLRC, Report 65 [23.183].
37. QLRC, Report 65 [23.182].
38. QLRC, Report 65 [23.201].
39. QLRC, Report 65 [23.200].
40. QLRC, Report 65 [23.202].
41. See also the definition of “disposition” in Succession Act 2006 (NSW) s 3(1).
42. QLRC, Report 65 [23.202].
43. Proposed s 344G.
44. The provision would apply equally to a disposition to surviving grandchildren of the testator.
45. QLRC, Report 65 [23.217].
46. QLRC, Report 65 [23.216].
47. QLRC, Report 65 [23.214].
48. Succession Act 2006 (NSW) s 41(2). See QLRC, Report 65 [23.219].
49. Succession Act 2006 (NSW) s 41.
50. QLRC, Report 65 [23.232].
51. QLRC, Report 65 [23.233]-[23.234].
52. QLRC, Report 65 [23.247].
53. QLRC, Report 65 [23.235]-[23.247].
54. QLRC, Report 65 [23.246].
55. Re Green’s Will Trusts [1985] 3 All ER 455, 460. See also Re Marais [2009] NSWSC 206 [22]-[23].
56. Re Benjamin [1902] 1 Ch 723.
57. QLRC, Report 65 [23.323]. See also New South Wales Law Reform Commission, Uniform Succession Laws: Administration of Estates of Deceased Persons, Discussion Paper 42 (1999) [17.54].
58. QLRC, Report 65 [23.323].
