I. INTRODUCTION
10.1 In 1837 the doctrine of implied revocation of wills by change of circumstances (para 9.2) was abolished and, in what is now to be found in s16 of the Wills, Probate and Administration Act 1898, it was enacted that no will shall be revoked by any presumption of an intention on the ground of an alteration in circumstances. Marriage was the only exception. The possibility of revocation of a will or gift by divorce was not even adverted to by the Real Property Commissioners in 1837. This is not surprising since it was not until 1857 in England that a marriage could be dissolved save by Act of Parliament.
10.2 In 1984 over 43,000 marriages in Australia were dissolved.1 Whilst issues of custody of children and property settlement can lead to protracted and bitter litigation, it is possible to dissolve the marriage itself by a short and simple legal process as soon as the prescribed ground exists. Often this takes place without the benefit of general legal advice.
10.3 Under the present law divorce does not effect a revocation of all or any part of a will made previously by one of the married partners. Thus, a will making provision for a testator s named spouse takes effect according to its terms unless the testator duly revokes it Indeed a gift in a will made to someone simply referred to as “my wife” or “my husband” does not lapse or fail though the marriage is dissolved,2 although the will will be revoked if the testator remarries.
II. SOME PROPOSALS AND MODELS FOR REFORM
10.4 In a number of jurisdictions, legislation has been proposed or enacted which operates in some way to revoke either a gift in a will or the will itself in the event of the divorce of the testator”
- a gift to the ex- spouse may lapse;
- the will may be treated as if the ex-spouse had pre-deceased the testator;
- the appointment of the ex-spouse as executor or trustee may be revoked; or
- the whole will may be revoked.
In most cases, annulment of marriage is a further ground for triggering off those consequences.
10.5 Before turning in detail to the ways and means of effecting a change in this aspect of the law, we shall briefly consider the trend in other jurisdictions and the arguments for and against change.
A. United States of America
10.6 Section 2-508 of the Uniform Probate C ode which was promulgated in 1969 provides:
If after executing a will the testator is divorced or his marriage annulled, the divorce or annulment revokes any disposition or appointment of property made by the will to the former spouse, any provision conferring a general or special power of appointment on the former spouse, and any nomination of the former spouse as executor, trustee, conservator, or guardian, unless the will expressly provides otherwise. Property prevented from passing to a former spouse because of revocation by divorce or annulment passes as if the former spouse failed to survive the decedent [deceased], and other provisions conferring some power or office on the former spouse are interpreted as if the spouse failed to survive the decedent. If provisions are revoked solely by this section, they are revived by testator’s remarriage to the former spouse. For purposes of this section, divorce or annulment means any divorce or annulment which would exclude the spouse as a surviving spouse within the meaning of Section 2-802(b). A decree of separation which does not terminate the status of husband and wife is not a divorce for purposes of this section No change of circumstances other than as described in this section revokes a will.
A number of states have adopted this provision.3
B. New Zealand
10.7 In 1973 the New Zealand Property Law and Equity Reform Committee reported On the Effect of Divorce on Testate Succession. The Committee was divided in its recommendations, but the majority favoured a reversal of the presumption that a divorce does not affect the testator’s testamentary intentions. In their opinion the existing presumption would accord with reality in the majority of situations. The Committee recommended that the former spouse should be deemed to have died so that dispositions and appointments to that spouse would lapse. It was proposed that the law should however recognise a testator’s expressed desire to make a testamentary disposition in favour of a spouse notwithstanding a forthcoming divorce. These recommendations were adopted in substance in section 2 of the Wills Amendment Act, 1977.4
C. Canada
10.8 In 1977, the Ontario Law Reform Commission reported on The impact of Divorce on Existing Wills. The Commission considered the case for and against altering the existing law, concluding:
Often the need for law reform, and the best remedy for present injustices, is clear and compelling In this area of the law, however, much can be said against change as well as in favour of it. On balance, we believe that in most cases testators would not wish to benefit their ex- spouses as generously once they are divorced, as would be the case if the marriage was still subsisting. Occasionally the opposite would be the case, but we believe such situations to be rare indeed Reversing the presumption that a divorce has no effect whatsoever on the will of one of the spouses, would bring the law closer to popular expectations.5
Pursuant to that Commission’s recommendation the Ontario Succession Law Reform Act was amended in 19776 to provide:
17(2) Except when a contrary intention appears by the will where, after the testator makes a will his marriage is terminated by a judgment absolute of divorce or is declared a nullity,
(a) a devise or bequest of a beneficial interest in property to his former spouse;
(b) an appointment of his former spouse as executor or trustee; and
(c) the conferring of a general or special power of appointment on his former spouse,
are revoked and the will shall be construed as if the former spouse had predeceased the testator.
Provisions to similar effect have been enacted in other provinces of Canada.7
D. England
10.9 Section 18A was added to the Wills Act 1837 by the Administration of Justice Act 1982 (UK). It provides:
18A. (1) Where, after a testator has made a will a decree of a court dissolves or annuls his marriage or declares it void -
(2) Subsection (1) (b) above is without prejudice to any right of the former spouse to apply for financial provision under the Inheritance (Provision for Family and Dependants) Act 1975.
the interest in remainder shall be treated as if it had not been subject to the life interest and, if it was contingent upon the termination of the life interest, as if it had not been so contingent
The section came into operation on 1 January 1983 and does not affect wills of testators dying before that date.8 Recommendations along these lines had been made in 1956 by the Royal Commission on Marriage and Divorce9 and in 1980 by the Lord Chancellor’s Law Reform Committee.10
E. South Australia
10.10 In South Australia the Law Reform Committee in its Report Relating to the Effect of Divorce upon Wills (1977) concluded that “for property to be given by will to a person from whom the testator or testatrix is divorced, if the will or testamentary instrument was executed before the divorce, will almost always frustrate the actual desires of the deceased in relation to his or her property”.11 The Committee proposed various amendments to the South Australian Wills Act, 1936 but to date no legislation has been passed on this topic.
F. Queensland
10.11 Revocation by divorce or by annulment of marriage is presently recognised in one Australian jurisdiction In Queensland, s18 of the Succession Act 1981 provides:
(1) The dissolution or annulment of the marriage of a testator revokes -
(2) So far as any beneficial disposition of property which is revoked by the operation of subsection (1) of this section is concerned the will shall take effect as if the spouse had predeceased the testator.
This provision was recommended by the Law Reform Commission of Queensland in its Report on The Law Relating to Succession (1978).12
G. Tasmania
10.12 The Law Reform Commission of Tasmania in its Report on Reform in the Law of Wills (1983) has also recommended a change on the ground that the present law, which assumes the divorced testator would still wish to benefit his ex- spouse no matter how long it is since they separated, would surely not be the testator’s intention in the majority of cases where, in the emotional stress of a divorce, the will is often forgotten. However, unlike most other jurisdictions, the solution preferred by that Commission is the revocation of the entire will.13 This recommendation was adopted by the Tasmanian Wills Amendment Act 1985.
H. New South Wales
10.13 The 1981 annual convention of regional law societies of New South Wales passed the following resolution:
That the Law Society of New South Wales should press for the law relating to wills to be amended to provide that upon any decree of dissolution of marriage being granted by the Family Court of Australia, then the wills of the parties to the action be automatically invalidated upon such decree becoming absolute, unless the Will is made in contemplation of the decree of dissolution of marriage.
It may be noted that this approach was similar to that advocated by the Law Reform Commission of Tasmania (para 10.12). However, following a report prepared by Mr A M Houen, a member of the general legal committee of the Council of the Law Society,14 the President of the Society wrote to the then Attorney General the Hon F J Walker QC MP on 9 March 1982 stating:
While the Council has at this stage neither adopted nor rejected the resolution of the 1981 Annual Convention of Regional Law Societies, there is certainly a strong body of opinion that serious and urgent consideration should be given by Government to amending the Wills, Probate and Administration Act, 1898 in accordance with the trend which has been followed in the USA Canada and Queensland and which appears to have been foreshadowed in the UK by the Royal Commission on Marriage and Divorce.
III. SHOULD THERE BE CHANGE?
10.14 Despite the collective strength of the case for reform represented by these proposals, we pause to consider the arguments against the adoption of a general rule that a gift or appointment should be revoked in the event that the marriage between the testator and the beneficiary/appointee is dissolved.15
- There is no proof that succession by inadvertence happens more often than that a gift to a divorced spouse is left standing intentionally Unless this can be shown, there is no case for reform.
- The law should not protect forgetful or inadvertent testators, but should favour conscious testation. If anyone is to suffer it is better that inadvertent testators should do so rather than those who intend to benefit a former spouse but who are ignorant of the change in the law that would be brought about by a proposal such as the one under contemplation.
- The introduction of such a new general rule is not likely to become better known by the community than the general rule dealing with revocation by marriage, and is likely to cause hardship for at least a proportion of testators who do not know of the change.
- Whilst marriage involves a positive duty to provide for one’s spouse, divorce involves no corresponding duty not to provide for one’s ex-spouse The will is bound, under the existing law, to be revoked by a subsequent marriage.
- The need to make a new will is less likely to be overlooked on divorce than it is on marriage. Experienced lawyers acting in divorce proceedings do advise their clients regarding the need to revise their wills.
- Some divorced testators fail to revoke earlier wills, simply because they do continue to feel some responsibility towards the former partner and intend the will to remain on foot. The proposed change would tend to defeat their expectations much as the existing rule about automatic revocation on marriage can defeat many testators.
- There is no compelling reason for singling out divorce or annulment as the only situations of change of circumstances in which wills should be revoked by operation of law.
- If revocation on divorce should be introduced, it should also apply to the permanent separation of persons formerly living in a de facto matrimonial situation, in order to place those persons on an equal footing with married persons.
- The Family Provision Act, 1982 provides a more useful exhaustive, accurate and discriminating means of dealing with actual cases of hardship in that it allows the testator’s dependants to assert claims in priority to the divorced spouse.
10.15 As the Ontario Law Reform Commission has pointed out, questions as to whether the law should be changed and, if so, in what way are difficult:
because they involve an implicit clash between two principles, both of which have a valued place within the laws firstly, the principle that people should be free to dispose of their estates in any way they think best, and secondly, the principle that neither injustice nor windfall benefits should result from carelessness or neglect. Achieving a balance between these two competing principles requires a careful examination of both the need for reform and the possibility that the remedy may be more extreme than the ill it seeks to cure.16
10.16 Despite the arguments we have just summarised, we are persuaded that the law should be changed and that termination of marriage should operate to revoke gifts by will in favour of the former spouse as well as the appointment of such a person as executor, trustee or guardian We agree with the general statements of the Law Reform Commission of Ontario set out in para 10.8 and otherwise adopt generally the views expressed in the reports of the various law reform agencies to which we have referred in part II of this chapter. Termination of marriage represents a fundamental change in a person’s life which, more often than not, renders inappropriate provisions in favour of the former spouse in wills made during the marriage. Though reported instances of difficulty with the existing law are few,17 an increasing number of people are getting divorced in Australia and many of them do so without seeking any legal advice. They may not therefore be alerted to the need to revise an earlier will or may mistakenly believe that the divorce will automatically revoke an earlier will.18 We believe that most testators, if they thought about it, would not desire to benefit their former spouses under their wills (at least, not as generously as had been intended before the divorce) and would be horrified at the thought of them administering their estates.
10.17 The respective property rights of the parties are usually resolved once and for all in the property settlement that accompanies or follows the dissolution of marriage. The Family Court is required, as far as practicable, to make such orders as will finally determine the financial relationships between the parties to the marriage and avoid further proceedings between them”.19 The 1983 amendments to the Family Law Act ensure that proceedings for maintenance and property settlement can, in appropriate cases, be instituted or continued despite the death of one of the spouses and that orders can be made and enforced against deceased estates.20 The need to alter the existing law relating to divorce is heightened by the proposal we made in the last chapter. The effect of the alteration can be mollified, in cases of particular need, by the Family Provision Act, 1982 which allows a former spouse to apply for provision out of an estate.21
10.18 We do not agree with the suggestion of the Law Reform Commission of Tasmania22 that divorce should lead to the revocation of the entire will. A similar proposal was aptly described as “an act of legislative overkill, which could well cause more hardship and injustice than the present law”.23 Such a solution would substitute the rules of intestate succession for the entire set of testamentary provisions contained in the will, subject in each case to any order made in favour of an “eligible person”24 under the Family Provision Act, 1982. Whilst some wills can be expected to contain gifts in favour of members of the divorced spouse’s family as unwelcome to the testator as gifts to the divorced spouse, this would be the exception rather than the rule. Total revocation would strike down a wide range of gifts including careful provisions made by a testator for the benefit of the children of an earlier marriage or small bequests to deserving friends and charities. It would also strike down a new will made by either of the spouses after separation and before divorce, even if quite deliberately no provision was made in it for the other spouse.
10.19 We would also reject two other alternatives that have been suggested or debated else where.25 The first is the repeal of section 16 (see para 10.1) and the enactment of a provision that a will is revoked by any change in the testator’ s circumstances. Whilst this is the position in some American jurisdictions, it is unsatisfactory because of the uncertainty it would re- introduce into the law of revocation of wills - the very thing which s16 was designed to eliminate. The second alternative solution we reject is to give the court a power to modify the will or to declare it revoked by the divorce. In one sense the court has a power along these lines under the Family Provision Act, 1982, but such jurisdiction is only available at the suit of a class of “eligible persons” and in limited circumstances. The second alternative would confer a much broader discretion on the court without any guidelines for its exercise. Since the only person who will be directly affected by the general proposal we make (the former spouse) can obtain redress under the Family Provision Act, 1982 in an appropriate case, we consider our proposed solution to be a more finely-tuned instrument.
IV. DETAILED RECOMMENDATIONS
A. Termination of Marriage
10.20 In para 10.16 we recommend that termination of marriage should operate to revoke gifts by will in favour of the former spouse and to revoke his or her appointment as executor, trustee or guardian We recommend that termination of marriage be deemed to occur on the happening of any of the following events:
- when a decree of dissolution becomes absolute;26
- when a decree of nullity is made (see para 10.21); or
- where there is an annulment in certain cases (see para 10.22).
In the balance of this chapter the term “former spouse” will include any spouse whose marriage or putative marriage has terminated by these means.
10.21 The Family Law Act 1975 provides for decrees of nullity of marriage on the ground that the marriage is void.27 A void marriage is no marriage at all, whether or not a decree declaring it void has been pronounced.28 However it is frequently desirable that the situation should be formalised by a judicial decree. In addition the Family Law Act vests the court with jurisdiction to make appropriate orders as to custody, maintenance and property settlement ancillary to the decree of nullity itself. In our opinion most persons who wish in fact to put an end to their void “marriages” would avail themselves of the remedy of decree of nullity. Accordingly we recommend that such a decree should be a relevant event indicating termination of marriage for the purposes of the rules we propose. It has been common elsewhere to provide that the making of a decree of nullity is such an event.29
10.22 Prior to the commencement of the Family Law Act 1975, a marriage was “voidable” on a number of grounds, and a voidable marriage could be ended by decree of annulment. However, this is no longer the law, and so we do not propose adding annulment to the list of relevant events, so far as Australian law is concerned.30 However, the notion of “voidable” marriage is still used in other jurisdictions and the annulment of such a marriage may have legal consequences so far as Australia is concerned.31 It is necessary to deal with the situation where a testator’s marriage has been annulled overseas where this has a bearing upon succession rights relating to New South Wales. For this reason we would add, as a further relevant event, the annulment of a marriage effected in accordance with the law of an overseas jurisdiction where such annulment would be recognised in Australia pursuant to s104 of the Family Law Act 1975.
10.23 We do not propose that these amendments should extend to the termination of de facto relationships. In chapters of our Report on Be Facto Relationships (1983) we discussed and rejected a proposal that de facto relationships should be equated with marriage. We favoured an approach that involved examining specific areas of the law to determine whether there were significant injustices calling for reform. Apart from the essential differences between marriages and de facto relationships, we can see real difficulty in defining and determining when a de facto relationship has come to an end (cf para 8.24).
B. Transactions affected
10.24 On the termination of marriage beneficial gifts in favour of a former spouse would be revoked “Gift” should have the meaning defined in s13(3) of the Wills, Probate & Administration Act, 1898.32
10.25 Similarly, the testamentary appointment of the former spouse as executor, trustee or guardian should be treated as omitted from the will on termination of marriage. These two proposals need some further consideration in the area of secret trusts and we shall deal with this matter later (para 10.36).
10.26 The American Uniform Probate Code (para 10.6) provides that termination of marriage revokes any provision conferring a general or special power of appointment on the former spouse. A power of appointment is a form of gift whereby the person given the power (the donee) may decide who is entitled to receive the property given A general power of appointment is akin to a gift in favour of the donee since it enables the donee to appoint in favour of himself or herself. A special power of appointment (eg to such charitable organisations as X may appoint) precludes the donee from appointing in his or her favour.33 Clearly a general power of appointment should be equated with a gift for the purposes of the rule under consideration and we propose that “gift” should be defined accordingly (cf para 10.24). It is arguable that a special power of appointment is more akin to the appointment of the donee as executor or trustee and that the gift itself should not fail on the termination of the donee’s marriage to the executor. However, in the comparatively rare cases where powers of appointment conferred by will are now encountered there is usually to be found a gift over in default of appointment. Following the American model, we think that it is appropriate that the special power of appointment itself should be revoked where the spouse is donee of the power. This, we believe, is more likely to accord with the intention of the testator if he or she had turned his or her mind to the question of the effect of the termination of marriage upon the will.
C. How would the revocation of gifts be effected?
10.27 A variety of legal means have been enacted or proposed elsewhere to give effect to the intended revocation of a gift in a will in favour of a former spouse.
10.28 The English Act (para 10.9) provides simply that the gift to the former spouse “shall lapse” except in so far as a contrary intention appears in the will. The draftsman of the section may have thought that this gave effect to the Law Reform Committee’s recommendation (by majority) that gifts to the former spouse should be treated as if he or she had predeceased the testator,34 but the Court of Appeals recent decision in Re Sinclair35 illustrates the unfortunate consequence of the choice of the single term “lapse”. In that case the testator provided that” if my said wife shall predecease me or fail to survive me... then I give.., the whole of my estate... unto the Imperial Cancer Research Fund”. He divorced his wife who survived him. In a contest for the estate between a relative who was the testator’ s next of kin on intestacy and the Fund, the former prevailed. It was held that “lapse” simply meant “fail” and that there was nothing in the section which would justify the court in equating failure by reason of divorce with failure by reason of death during the testator’s lifetime. Thus neither of the events provided in the will as giving rise to the substitutionary gift in favour of the Fund in fact occurred and the estate devolved as on intestacy. Although the Court concluded that had the testator been here now he would probably have wished his estate to go to the Fund,36 it was not prepared to read the word “lapse” as having any broader effect than already stated. We agree with the view of a commentator37 that this conclusion is unfortunate and ought to be avoided in the framing of the legislation.38
10.29 The most commonly adopted mode of effecting the revocation of a gift in favour of a former spouse has been to provide that, on termination of marriage, the gift is revoked and the will is to be construed as if the spouse had predeceased the testator. This is the approach adopted in the Queensland (para 10.11) and Canadian (para 10.8) legislation as well as in the American Uniform Probate Code (para 10.6). The rationale for adopting this dual approach is explained by the Law Reform Commission of Queensland:
In order to make the consequences of the revocation clear, so far as beneficial dispositions to the spouse are concerned, it is desirable to provide that dispositions should have effect as if the spouse had predeceased the testator. This would ensure that if, for instance, a life interest were left to a wife, the effect of a divorce would be to accelerate the interests of the beneficiaries entitled upon the death of the spouse; and if the testator had included a substitutional provision in his will to take effect in the event of the prior death of his wife, that substitutional provision would still take effect, as this would presumably best accord with the testator’s intentions.39
Clearly such an approach avoids the problem of the English section as interpreted in Re Sinclair (para 10.28) and would have lead to the preferable result in that case of the Fund succeeding to the estate.40
10.30 However the will should only be construed as if the ex-spouse predeceased the testator in respect of property which is the subject of a revoked gift to the ex-spouse. This is the approach taken under the Queensland (para 10.11) and American (para 10.6) models, and is necessary to ensure that the interests of other, deserving beneficiaries are not affected. This could happen, for example, where there is a gift to someone other than the ex- spouse which is conditional upon the ex-spouse surviving the testator. If the will as a whole were given effect as if the ex-spouse had predeceased the testator, such a gift would fail. Indeed, we agree with the recommendations of the South Australian Law Reform Committee that the amendment should be framed so as not to operate in such a way as to make any class of beneficiaries under the will close earlier than it would have done if the gift had not been revoked.41
D. Savings
10.31 We have considered a provision modelled on the American Uniform Probate Code (para 10.6) that if a gift or appointment is revoked solely by operation of the section it should be revived by the testator’s remarriage to the former spouse. However we do not recommend that such a saving be enacted In view of the general rule that former wills are to be revoked on marriage unless it is clear that they were intended to survive the marriage (see Chapter9), any specific revival rule along these lines would cause unnecessary complications.
10.32 In each of the models we have drawn upon (except Queensland: para 10.11) termination of the marriage does not affect gifts or appointments where a contrary intention is expressed in the will. Clearly testators should be able to exclude the operation of the statutory rule which we suggest, eg to enable appropriate wills to be made as part of a proposed property settlement accompanying dissolution of marriage. However there is no compelling reason in principle why the proof of a contrary intention should be restricted to expressions in the will.42 The legislation which we propose overrides an earlier expression of intention to benefit a spouse, and replaces it with what may be described as a rule of thumb. If the purpose of this is to approximate more closely the testator’s likely real intentions, it does not seem necessary to restrict proof of the testator’s real intentions to formally expressed intentions - especially since the testator probably never knew of the rule. It should be possible to use statements of the testator as evidence of his or her intention. Such a stance would be consistent with the use of this type of evidence in ascertaining the testator’ s true intentions in other areas.43 Whilst the admissibility of evidence of intention outside the will itself, including evidence of statements by the testator, will create uncertainty, this is the necessary price to pay to ensure that a testator’s real intentions are not frustrated. Although there is a danger of fraud, the courts are well used to weighing evidence and are alert to the danger. We consider that these arguments are sufficiently cogent to justify a recommendation that the general rule should be rebuttable by any evidence, including evidence of statements made by the testator, which establishes to the satisfaction of the court that the testator did not at the time of the termination of marriage intend the proposed general rule to apply (cf para 9.2 1(a)).
10.33 The English model (para 10.9) expressly reserves the former spouse’s rights to apply under that country’s equivalent of the Family Provision Act Under the New South Wales Family Provision Act, 1982 an order takes effect as if the provision had been made in a codicil to the will of the testator.44 In the case of an order in favour of a former spouse it could possibly be argued that our proposed amendment would strike down such codicil. We suggest therefore that the new section should be expressed to operate without prejudice to any right of the former spouse to apply for an order for provision under the Family Provision Act, 1982.
10.34 Gifts by will which are avoided by operation of law can be “revived” by the subsequent republication of the will in particular circumstances. Thus, a gift to an attesting witness can be saved from the impact of section 13 (para 8.1) if the will is subsequently republished by an independently attested codicil.45 Similarly, a will which is revoked by the subsequent marriage of the testator is republished by the execution of a codicil to that will, thereby “reviving” gifts and other applicable provisions in the will.46 The legislation which we propose should be framed so as to preserve the possibility of a gift or appointment in a will which is revoked on the termination of marriage being saved by the republication of the will after the relevant event by a will or codicil which evinces no intention to delete or modify the gift or the appointment.
10.35 Nothing we have proposed is intended to affect the operation of a contract made between the subsequently divorced spouses concerning the making or non-revocation of a will. In our view the interference with such arrangements is best left to the working out of an appropriate property settlement by the Family Court of Australia or to be dealt with in the context of proceedings under the Family Provision Act.47 The question arises whether it is necessary to make special provision to achieve this saving It has been held that a contract not to revoke a will is not broken by the subsequent marriage of the promisor because the revocation is regarded as resulting from operation of law and not from the act of the party.48 Since it is possible that such reasoning might apply by analogy to revocation of gifts by divorce, despite some American authority to the contrary,49 we think it desirable that the saving of beneficial gifts made in accordance with contracts binding on the testator be clearly expressed in any legislation implementing our recommendations. This has been done in New Zealand.50
E. Secret trusts
10.36 A fully-secret trust arises where a gift is made in absolute terms on the face of the will but the testator, before or after the date of the will, communicates to the legatee an intention that the legatee hold the gift in trust and the legatee accepts the trust or acquiesces in it. A half-secret trust differs from a fully-secret trust in that the will declares that the property is given to the beneficiary on trust though the trusts are not expressed in the will, but have likewise been communicated to the beneficiary by the testator before or at the time the will was made. In each case the secret trust operates outside the will.51 The fact that a secret trust is said to operate outside the will means that the effect of certain formalities and statutory rules about wills can be avoided. For example, such a trust will be enforced in certain cases even though it was made orally. In addition, where the will gives property to X and there is evidence that a secret trust binds X to give a gift to Y then even though Y is an attesting witness, Y can still take the gift this avoids the application of the current rule preventing interested attesting witnesses taking their gift and occurs because it is said that Y takes under the trust, not under the will.52 In para 10.24 we recommended that on the termination of marriage beneficial gifts in favour of a spouse would he revoked. The term “beneficial gift” is contained in s13(1) of the Act (para 8.1) and we would anticipate that the existing law interpreting that provision would be imported into the construction of our proposed new provision if a similar expression were used (see para 10.24). On this reasoning, where the testator left a gift to X but there was a secret trust created in favour of Y (his or her spouse), our proposals in their present form would not lead to the revocation of s beneficial interest in the event that Y and the testator were subsequently divorced But they would, in a different case, lead to the revocation of a gift by will to Y (the testator’s spouse) even though that gift was subject to a fully-secret trust in favour of X in the event that Y and the testator were subsequently divorced: Y's gift would be a “beneficial gift” for the purposes of s13(1) even though held in trust for X under the secret trust.
10.37 As far as we are aware secret trusts are not encountered frequently in New South Wales and the instances of secret trusts involving spouses who subsequently divorce will he very few indeed. This factor inclines us to the view, which we recommend, that no provision be made in the legislation relating to secret trusts because such provision would add undue complexity to an otherwise comparatively simple piece of legislation. If a contrary view were taken, the expression “beneficial gift” should be defined to include a gift outside the will under a secret trust in such a way that the gift to the named legatee would be saved if such gift were held by that legatee pursuant to a valid secret trust and the gift to the beneficiary under the secret trust would be revoked even though such beneficial gift was made outside the will itself. One would also, in such case, need to ensure that the provision deeming a married beneficiary who divorces the testator to have predeceased the testator did not operate to strike down secret trusts assumed by that beneficiary in favour of third persons: the risk of such trusts failing lies in the fact that it is likely that where a secret trustee predeceases the testator the secret trust fails.53
F. Summary of recommendations
10.38 For the foregoing reasons we recommend that in lieu of the existing rule that termination of marriage does not in itself affect provisions in a will made in favour of a spouse:
(a) on the termination of marriage any beneficial gift by will in favour of a former spouse (which expression includes putative spouse) and any power of appointment conferred on a former spouse shall be revoked, and the testamentary appointment of a former spouse as executor, trustee or guardian shall be treated as omitted from the will.
(b) in addition to the result specified in (a), on the termination of marriage any property prevented from passing beneficially to the former spouse or putative spouse shall pass as if that person predeceased the testator, but no class of beneficiaries under the will is to close earlier than it would have done if the gift had not been revoked.
(c) “termination of marriage” means:-
(i) the dissolution of the testator’s marriage (upon the decree becoming absolute);
(ii) the annulment of the testator’ s marriage effected in accordance with the law of an overseas jurisdiction where such annulment would be recognised in Australia pursuant to section 104 of the Family law Act 1975; or
(iii) the making of a decree of nullity in relation to a void marriage in which the testator was a putative spouse.
(d) the result specified in (a) and (b) should not occur -
(i) where the court is satisfied by any evidence, including evidence of statements made by the testator, that the testator did not at the time of the termination of marriage intend that such result should occur; or
(ii) where the gift or testamentary appointment is contained in a will which is republished after the termination of marriage by a will or codicil which evinces no intention to affect the gift or testamentary appointment.
(e) the result specified in (a) and (b) should not affect:
(f) in these recommendations “gift” has the meaning contained in the existing s13 of the Act.
FOOTNOTES
1. Figures released by the Australian Bureau of Statistics in May 1985.
2. In re Dewing [1955] VLR 238.
3. As at 1 September 1982 14 of the United States had enacted the Code in its original or amended form Handbook of the National Conference of Commissioners on Uniform Stare Laws and Proceedings (1982) p472.
4. The legislation departs from the form proposed by the Committee particularly in relation to the manner whereby the revocation is to be effected. It was extensively criticised by R J Sutton. Legislation The Wills Amendment Act 1977 (1979) 8 NZUL Rev 413.
5. Report at p4.
6. See now Succession Law Reform Act RSO 1980 c488, s17(2).
7. Eg British Columbia (Wills Act, 1979, s16): Manitoba (See now Wills Act SM 1982-83-84. c31. Section 18(2)); and Saskatchewan (Wills Amendment Act. 1981. s3). The Law Reform Commission of British Columbia considered various criticisms of the form of the section in its Report on The Making and Revocation of Wills (1981) at pp69-71 but deferred making any specific recommendations for change.
8. Administration of Justice Act 1982. ss73(6) and 76(11).
9. Cmd 9678 paras 1187-1192.
10. Cmnd 7902 paras 3.26-3.38. There was a minority view recommending against change (paras 3.35-3.38).
11. Fourty-fourth Report at p4.
12 At p12. The form of the Queensland section is criticised by Preece, The 1981 Queensland Succession Law Reform, (1983) The Queensland Lawyer 108 at pp132-133.
13. Report at pp 14-15
14. Set out in (1982) Law Society Journal p404.
15. The arguments against change arc cogently advanced by Mr C J Rowland of the Australian National University in an unpublished paper, Revocation of Wills by Divorce: Is There a Need for Reform. Whilst the Commission has rejected Mr Rowland’s central argument (against change) it has drawn upon other parts of the paper in formulating its proposals It may be noted that this paper was written before the Family Provision Act, 1982 which allows a former spouse to make application for maintenance.
16. Report on The Impact of Divorce on Existing Wills (1977) at p1.
17. Unreported instances are mentioned in various reports of law reform agencies. See also Perpetual Executors & Trustees Association u/Australia Ltd v Vine [1955] VLR 200: Re Brechin [1973] 38 DLR (3d) 305; Goldfield, Shore and Canada Trust Company v Kosloesky [1976] 2 WWR 553.
18. One very experienced solicitor who wrote to the Commission (Mr J D Steed) pointed out that he has made a practice of dealing with divorcing parties to find out whether they have made a will and, if so. whether they wish to change it. Almost invariably they wish to change their will. The majority indicated that they had forgotten about their will and were grateful for being reminded of the need to make a new will. The minority (but forming quite a substantial overall percentage) indicated that they believed that divorce would automatically revoke the will and that on divorce their children would inherit their whole estate as next-of-kin: letter 30 July 1985 from Connah Steed & Co.
19. Family Law Act 1975, s81.
20. The statutory amendments and case law are summarised by Evatt CJ in Smith v Smith (1984) FLU 91-525 at pp79,239-79,243. Occasionally orders are made requiring a spouse to make provision in a will in favour of the other spouse as a part of or conditional upon final relief being granted: Broun and Fowlet, Australian Family Law and Practice CCH para 38-700. Where such orders are to be put into effect before the decree becomes absolute care will have to be exercised to frame the will in such a way as to overcome the general rule of revocation on divorce embodied in our proposal if our recommendations are adopted. As to rebutting the rule which we propose, see para 10.32.
21. Family Provision Act. 1982, s6(1) (definition of “eligible person”).
22. See para 10.12 of this Report.
23 Ontario Law Reform Commission Report on The Impact in Divorce on Existing Wills (1977) at p6.
24. Sec note 21.
25. Further reasons which we would respectfully adopt. for the rejection of these two alternatives are given by the Law Reform Committee of South Australia in its Fourty-Fourth Report Relating to the Effect of Divorce Upon Wills (1977) at pp5, 6.
26. As to when a decree of dissolution becomes absolute, see Family Law Act 1975 (Comm), s55.
27. Section 51. The grounds upon which a marriage is void are set out in Part III of the Marriage Act 1961.
28. Ross Smith v Ross Smith [1963] AC 280 at 315-316.
29. This appears in the New Zealand (para 10.7), Ontario (para 10.8) and English (para 10.9) model.
30. In para 13.1 we propose that the amendments suggested in this Report should apply in the case of deaths occurring after the commencement of the Act. In strict logic, one might provide that annulments in Australia prior to 1975 where the party to the former marriage dies after our proposals become law ought to be included. However the likelihood of such events occurring in circumstances where there is an unrevoked will predating the annulment seems so small that we have disregarded it in our recommendations.
31. Succession to movable property of a testator domiciled in New South Wales at his or her death and to immovable property situated in New South Wales is determined by New South Wales law, and the testator concerned may be someone whose voidable marriage has been annulled overseas in circumstances that the annulment would be recognised in Australia Section 104(3) of the Family Law Act 1975 provides inter alia that a dissolution or annulment of a marriage effected in accordance with the law of an overseas jurisdiction shall be recognised as valid in Australia where certain conditions apply.
32. See chapter 8, note 3.
33. See generally Halsbury’s Laws of England 4th ed vol 36 para 806.
34. See note 12.
35 [1985] 2 WLR 795; (1985) 1 All ER 1066. The case on appeal is discussed by A Mithan. The Effect of Dissolution and Annulment of Marriage on Wills- Re Sinclair (1985) Law Society’s Gazette 2922. Cf also Re Doland’s Will Trusts [1970] 1 Ch 267.
36. Ibid at 803 (WLR) and 1072 (All ER).
37. A Mithan, The Effect of Dissolution or Annulment of Marriage on Wills (1984) Law Society Gazette at p 3324. Further compelling reasons supporting this view are advanced by R T Oerton, The Effect of a Testator’s Divorce on his Will (1985) 129 Solicitors’ Journal 646.
38. The New Zealand legislation is, in our view, subject to the same criticism in that it uses the technique of declaring gifts “null and void” on the happening of a relevant event Wills Amendment Act. 1977, section 2(2) (a).
39. Report on The Law Relating to Succession (1978) at p12.
40. The Law Reform Commission of British Columbia has suggested (note 8 above) that the Canadian model (see para 10.8) contains two potentially inconsistent notions which it describes as revocation and deemed lapse. We respectfully doubt this, and are confident that provisions such as the Canadian (para 10.8) and Queensland sections (para 10.11) would be construed so as to avoid any repugnancy. It seems to us that the provision striking down the gift would be treated as applying to the position of the donee and that the provision about construction of the will to the respective rights of other parties.
41. Report Relating to the Effect of Divorce upon Wills (1977) at p8. Cf Wyndham v Darby (1896) 17 LR(NSW) Eq 272.
42. We have drawn substantially upon the arguments advanced by Mr C J Rowland in his paper referred to at n15.
43. Re Resch’s Will Trusts [1969] 1 AC 514 at 547-8. See, generally para 5.4 of this Report Cf also the willingness of the courts to go beyond the will in determining whether there is an expression of contemplation of a marriage sufficient to displace s15(1) of the Wills, Probate and Administration Act. 1898): see para 9.1. Section 17 of the Queensland Succession Act 1981 goes further and provides that extrinsic evidence, including evidence of statements made by the testator, is admissible to establish that an expression contained in the will is an expression of contemplation of a particular marriage.
44. Family Provision Act. 1982, s14.
45. Re Trotter [1899] 1 Ch 764.
46. Cooper v Cooper (1856) 1 Ch R 217. See also Perkins v Michelthwaire (1714)1 P Wms274 (24 ER 386) and Re Jackson (1964) 82 WN(NSW) (Pt 1) 62.
47. Cf Section 22(4)(f) of the Family Provision Act, 1982.
48. Re Marsland [1939] 1 Cl 820; Clausen v Denson [1958] NZLR 572.
49. Rookstool v Neaf (1964) 377 SW 2d 402.
50. Wills Amendment Act 1977, s2(3)(a).
51. See, generally Jacobs’ Law of Trusts in Australia 4th ed paras 711-724.
52. Re Young [1951] Ch 344. Sec also Re Gardner [1923] 2 Ch 2 IC which holds that (unlike a legacy which will lapse if the legatee predeceases the testator a beneficiary under a secret trust acquires an interest from the date of communication. with the result that the share of such a beneficiary dying between then and the death of the testator does not lapse.
53. There are conflicting authorities n the point see Pettit, Equity and the Law of Trust 4th ed (1979) p98.
54. The recommendations embodied in this chapter of the Report when it was disseminated in draft form (see para 1.9) were invariably endorsed. In particular the Family Law Council indicated its support for the proposals: letter to Commission 20 November 1985.
