Beattie v Daly [2011] NSWSC 1023

Supreme Court New South Wales

Medium Neutral Citation: Beattie v Daly [2011] NSWSC 1023 Hearing dates: 5 August 2011 Decision date: 01 September 2011 Jurisdiction: Equity Division Before: Gzell J Decision: Authority not blank when signed. Donor had capacity to make gift. Gift perfected. Donee's taking cheque from Donor's letter box not illegal. Authority not terminated on death. No undue influence. Catchwords: GIFTS - Gifts Inter Vivos - whether made - whether undue influence - whether unconscionable to retain - imperfect gifts - authority to draw cheque - cheque drawn, presented and paid after donor's death - donee not requiring court's assistance to acquire cheque Legislation Cited: Freedom of Information Act 1982 (Cth) Cases Cited: Corin v Patton [1990] HCA 12; (1990) 169 CLR 540 Blackett v Darcy [2005] NSWSC 65; (2005) 62 NSWLR 392 Watt v Lord and Another [2005] NSWSC 53; (2005) 62 NSWLR 495 Category: Principal judgment Parties: Janelle Beattie (First Plaintiff/Cross-Defendant) Peter Shannessy (Second Plaintiff) Garry Daly (First Defendant/First Cross-Claimant) Michael Shannessy (Second Defendant/Second Cross-Claimant) Representation: Counsel L Ellison SC (Plaintiffs/Cross-Defendant) N Kirby (Defendants/Cross-Claimants) Solicitors Matthew Trevillion (Plaintiffs/Cross-Defendant) Turner Freeman (Defendants/Cross-Claimants) File Number(s): 2008/310031

Judgment 1Isabel Maud Webb known as Betty Webb died on 26 December 2007. She was not married and had no children. She left her estate to her nieces and nephews. 2To her nephew Mark Webb and her niece Alyson Yoshida she gave $1,000 each. The rest of her estate she gave equally to her niece Janelle Beattie and her nephews Garry Daly, Michael Shannessy, Peter Shannessy and Jeffery Daly. 3Probate of her will was granted to her executors and trustees, Garry Daly and Michael Shannessy. 4The plaintiffs, Janelle Beattie and Peter Shannessy, seek an order that probate granted to Garry Daly and Michael Shannessy be revoked and that Janelle Beattie be appointed administrator cta of the will. 5On 15 December 2007, Betty Webb signed a piece of paper. The paper contained writing addressed to Uniting Financial Services for the attention of Andrew Scott as follows: "Re:- Termination Of Account No. XXXXXXXXX.X Deposit No XXX Good morning Andrew, Further to your discussions with my Niece Janelle Shannessy, I authorize the release of the funds in the above mention account to Janelle Dianne Shannessy, effective todays Friday 15 th December 2007. Regards, Ms Isabel Webb" 6Janelle Beattie said she posted the piece of paper the next day. It has a receipt stamp of Uniting Financial Services dated 24 December 2007. A cheque for $28,180.48 in favour of Janelle Beattie on the account of Betty Webb was drawn on 27 December 2007 after Betty Webb's death on 26 December 2007. On 31 December 2007 Janelle Beattie took the cheque from Betty Webb's letterbox and cashed it in January 2008. 7By amended cross-claim, Garry Daly and Michael Shannessy sought an order against Janelle Beattie that the transaction embodied in the letter dated 15 December 2007 be set aside, a declaration that Janelle Beattie held $28,180.48 on trust for them, an order for payment to them together with interest and damages for conversion in the amount of the cheque. 8Garry Daly and Michael Shannessy allege that Betty Webb signed a blank piece of paper on 15 December 2007 on the urging of Janelle Beattie. They rely upon hospital clinical notes that at 5.15 am on 17 December 2007 recorded: "Pt unsettled throught shift; on/off during night. Upset about a relative that visited her yesterday pm? Making her sign a blank paper. Pt states, expressed to be very anxious @ beginning of ND." 9The clinical notes were a continuous record and accurately stated the time of this conversation. Betty Webb was confused. She had signed the paper on 15 December 2007. 10Max Dennett had been Betty Webb's partner for 26 years. He affirmed in his affidavit that he went to the hospital and had a conversation with Betty Webb as follows: "Betty: I just signed a blank piece of paper. It was so silly of me to sign a blank paper - I was mad to do that. As soon as I signed it, I realised it was the silliest thing to do. Max: Look, I rang up Joyce before coming here and spoke to her about it. She said that you shouldn't worry about it - maybe it was just something to do with your pension." 11Joyce Daly was the sister of Betty Webb. The probability is that this visit occurred later on 17 December 2007. Again, Betty Webb was confused as she had not "just signed" the letter. Max Dennett died before trial. 12On 18 December 2007 Betty Webb was interviewed by a social worker. The clinical notes contained the following: "Initial interview with Pt. Note events over the w/end (? pt unsure about signing a blank document)... Pt stated the 'blank document' was not blank. It was in fact concerning her pension + it was her niece, Janelle, that had asked her to sign it. Pt stated this is no longer a concern." 13Janelle Beattie said she typed the letter of 15 December 2007 after Betty Webb had insisted that she accept the gift and after she had spoken with Andrew Scott as to what was necessary to close the fund. 14Max Dennett was not available for cross-examination and Janelle Beattie was not shaken in cross-examination. 15Garry Daly and Michael Shannessy relied solely on the entry in the clinical notes of 17 December 2007. They refused to accept that the letter of 15 December 2007 had ceased to be a matter of concern to Betty Webb by 18 December 2007. They complained to the Fraud Squad and when the police declined to act they obtained the records of the police investigation under the Freedom of Information Act 1982 (Cth). 16Janelle Beattie said that Betty Webb had always said that money was set aside for her. She said that Betty Webb had said that when she got back from a holiday in Bali she would sit down and have the money sent. But Janelle Beattie said that she discouraged the gift telling Betty Webb she should spend it on herself and go on further trips. 17According to Janelle Beattie, Betty Webb was alert when she read and signed the letter on 15 December 2007. When she arrived, Betty Webb was sitting up having a cup of tea. She asked: "Is that letter we spoke about typed up yet?" Having read the letter, Betty Webb said: "that's good" and signed it. She then said: "I'm glad you're going to get the money for all you've done for me over the years". A few days later Betty Webb said: "have you got the cheque yet?" to which Janelle Beattie replied: "no I haven't yet, next time I go to the unit I'll check your letters." 18Janelle Beattie was an unsatisfactory witness. Notwithstanding the specific details of conversations in her affidavit, she maintained throughout her cross-examination that she could not generalise and did not remember conversations or dates. She said Betty Webb, just in general conversation, said that she had money put aside for her. 19But her testimony, general though it was, was supported by the evidence of her husband Christopher Beattie and her mother-in-law Janette Beattie. 20Christopher Beattie said that at the hospital he heard Betty Webb say that she wanted to give Janelle money in a fund. He said that Betty Webb would need to give a letter of authority. He was at the hospital when Beattie Webb signed the letter of 15 December 2007. He said he saw her read the letter then sign it. 21There was an aberration in the evidence. Christopher Beattie said that he heard Betty Webb once at her unit say she wanted to give Janelle Beattie money in a fund when it matured to which he said Janelle Beattie replied: "that would be very kind". That was inconsistent with Janelle Beattie's statement that when offered the gift in conversation she replied that Betty Webb should use the money on herself. But I do not regard that as sufficient to doubt the evidence of Janelle Beattie or that of her husband. 22Janette Beattie was an impressive witness. She thought about her answers and was precise in her recounting of events. She said that on a number of occasions she heard Betty Webb say that she had approximately $20,000 that she was going to give to Janelle Beattie. She said that this happened more than once in the hospital as well as on earlier occasions. She said that Janelle declined the gift on a number of occasions. In the hospital she said that Betty Webb said she wanted to give Janelle something because she had always been so good to her. She said that on that occasion she did not think that she mentioned how much. It was put to her that she swore her affidavit to help Janelle Beattie. She said: "no, I didn't think that, I don't think that. Betty wanted her to have it." 23Janette Beattie was present when Betty Webb signed the letter of 15 December 2007. She was taxed about her inability to remember what was said when the letter was signed and it was suggested to her that she had not witnessed the signing because her affidavit was based on an earlier declaration, the only difference being that in the affidavit she did not repeat what she had said in the declaration about being present when the letter was signed. Janette Beattie denied this suggestion. 24Peter David Shannessy, Janelle Beattie's brother, said he spoke with Betty Webb in the hospital when she mentioned that she had the intention of giving Janelle Beattie money. That was all she said because Peter Shannessy said that each time she ventured down this avenue he would stop her by saying that she should just worry about getting better. 25Reliance was placed upon complaints made by Betty Webb about Janelle Beattie. Garry Daly said that Betty Webb complained after her trip to Bali that Janelle Beattie had stuffed her bags with things without telling her what they were and she was worried about Customs. She also said that she had paid for things twice during the trip to Bali and Janelle Beattie had forced her to terminate a rental agreement over her garage. 26Michael Shannessy said that Betty Webb complained to him that Janelle Beattie had stuffed her bags with her own things and did not tell her what they were and she was worried about taking them through Customs. When they got back to Sydney, Chris Beattie picked up Janelle Beattie at the airport and she was forced to take a taxi home and had to carry her luggage up the stairs to her unit. 27Joyce Daly said that Betty Webb complained to her that Janelle had made her terminate a rental agreement over her garage, as Janelle needed it for a while as she was moving to Queensland. She said Janelle Beattie put her things in her luggage and did not tell her what they were and Christopher Beattie picked Janelle Beattie up from the airport and she had to take a taxi home carrying her luggage herself. Joyce Daly also said that Betty Webb complained that she paid for the tickets twice. Joyce Daly was confused because she also said that the taxi driver had carried her bag to her unit. 28Max Dennett affirmed that Betty Webb told him when she returned from Bali that she had paid for the trip twice because Janelle Beattie had insisted that she had not paid on the first occasion 29On the other hand, Janelle Beattie candidly said she had asked Betty Webb to cancel the rental agreement on the garage and she and Janette Beattie pointed out that Betty Webb had travelled back from Bali with Janette Beattie while Janelle Beattie and her family remained behind. Janette Beattie had travelled in a taxi with Betty Webb to her unit where she asked the driver to take the bags upstairs. 30Betty Webb was clearly confused about the details of the Bali trip. Janelle Beattie said that she had bought Betty Webb's ticket on her credit card, which Betty Webb refunded months later. What she had put in Betty Webb's bag were children's outfits that she intended to sell. Janelle Webb said that Betty Webb did not have foreign currency with her in Bali and she gave her hers. 31Peter Shannessy said that when Betty Webb got to Bali she did not have money with her and Janelle Beattie helped her out. 32Because Betty Webb complained about Janelle Beattie, wrongly as it turns out, does not mean that she would not make a gift to Janelle Beattie. Her complaints may have been regarded as mere irritation by Betty Webb, insufficient for her to change her mind about making a gift to Janelle Beattie. 33I prefer the evidence of those who saw Betty Webb sign the letter of 15 December 2007, Janelle Beattie, Christopher Beattie and Janette Beattie. I find that the letter of 15 December 2007 was not blank when it was signed by Betty Webb and she signed it intending to make a gift of the moneys in the fund to Janelle Beattie. 34I find that Betty Webb was confused when on 17 December 2007 she said she had signed a blank piece of paper. 35The executors alleged that Betty Webb was not of sound mind on 15 December 2007. I reject that submission. There is nothing in the clinical notes to support the contention. Her health was recovering such that the medical staff contemplated the removal of the external pacemaker and it was disconnected on the morning of 16 December 2007. It was only at 7.00 pm on that day that she was noted to be short of breath and she had the unsettled night reflected in the note made at 5.15 am on 17 December 2007. 36Janelle Beattie said that the deceased raised the subject of the document, which was produced, she read it and signed it. A few days later she raised the subject again. 37According to Michael Shannessy she was recovering quite well. 38Joyce Daly recorded conversations with Betty Webb about the account she had and its prospective maturity. That was in November 2007. 39Betty Webb was alert, sitting up having a cup of tea when the letter was signed. 40All of this evidence negates the suggestion that on 15 December 2007 Betty Webb lacked the mental capacity to make a gift. 41The executors then submitted that the gift was never perfected and equity will not assist a volunteer. Reference was made to Corin v Patton [1990] HCA 12; (1990) 169 CLR 540 at 559, 582. 42But Janelle Beattie did not need the assistance of equity to perfect the gift. She had the money that Betty Webb intended she should have. As Young CJ in Eq pointed out in Blackett v Darcy [2005] NSWSC 65; (2005) 62 NSWLR 392 the rule that equity does not assist a volunteer is not a complete statement of the law . 43That was a case in which two days before his death the testator drew a cheque for $650,000 in favour of his executor and one of her brothers. It was contemplated that the $650,000 would be used to buy a home which would be in the control of the executor on condition that she looked after her two brothers. The day after the testator's death, the cheque was deposited into the bank account of the executor and her brother and was paid. It was held that the money did not form part of the testator's estate on the basis that the commercial attributes of a cheque are now such that if parties behave in a way that they intend the cheque to constitute a gift the gift may be complete even though the cheque is not presented before the death of the drawer and on the basis of the absence of the need for the aid of equity. His Honour said at [31]; 397: "It must always be remembered that the rule that equity does not assist a volunteer is not a complete statement of the law and is only relevant if the donee requires the assistance of a court of equity in order to gain the property. Where the donee has gained the property (at least where he or she has not done so illegally), then there is usually no equity in the donor to recover back the monies." 44It was submitted that it was illegal for Janelle Beattie to take the envelope with the cheque from Betty Webb's post box and that Blackett did not apply. 45But Andrew Scott had told Janelle Beattie the cheque would be sent to Betty Webb's address and the letter of 15 September 2007 was headed by the address of Betty Webb. Janelle Beattie expected the cheque to be posted to Betty Webb's address. Betty Webb knew it was going to her address and, by her silence in response to Janelle Beattie's statement that she would check the mail at Betty Webb's address, she consented to Janelle Beattie's taking the cheque when it arrived in Betty Webb's mailbox. 46I do not understand Young CJ in Eq's possible exception for illegality to apply to the instant circumstances. Betty Webb intended that Janelle Beattie have the cheque to be issued by Uniting Financial Services. She found the envelope from that company in the letterbox and took it. That is what Betty Webb wanted her to do. I reject the submission that Betty Webb's gift was not perfected. 47The executors then argued that the authority terminated when Betty Webb fell into a coma on 20 December 2007 or, at the latest, when she died on 26 December 2007. 48I do not accept that the authority terminated when Betty Webb became incapacitated. No authority was cited for this proposition. 49Nor do I accept that the authority terminated on the death of Betty Webb. The authority was all that Betty Webb could do to perfect her gift. The situation is analogous to that in Watt v Lord and Another [2005] NSWSC 53; (2005) 62 NSWLR 495 where I held that where a memorandum of transfer in registrable form and a certificate of title had been delivered to a transferee, the transferee had a right to registration and the Registrar-General was not precluded from registering the transfer by reason of the deaths of the registered proprietors. At [54]; 507 I said: "In my view, I am not bound by authority to conclude that the memorandum of transfer in this case became ineffective upon the death of Mr and Mrs Holliday senior. They had armed Mr Colin Lord with an instrument in registrable form and the certificate of title and they took no further interest in the land. In my view, the memorandum of transfer remains an effective document and the Registrar-General is not precluded from registering the transfer by reason of the deaths of the registered proprietors." 50By the letter of 15 December 2007 Betty Webb had armed Uniting Financial Services with authority to draw a cheque in favour of Janelle Beattie in the amount in her account. It was, therefore, appropriate for Uniting Financial Services to act on the authority and draw the cheque in favour of Janelle Beattie and to deliver it to the post box of Betty Webb. That was done. The gift was complete. 51Finally, the executors alleged that Betty Webb signed the authority under undue influence from Janelle Beattie. It was submitted that Betty Webb was in a position of special disadvantage to Janelle Beattie. Alternatively, it was submitted that it was unconscionable for Janelle Beattie to retain the benefit of the transaction. 52I reject those submissions. It was Betty Webb who initiated the making of the gift. It was she who inquired whether Janelle Beattie had received the cheque. Her confusion about a blank piece of paper was dispelled. Christopher Beattie and Janette Beattie observed no undue influence when Betty Webb signed the letter of 15 December 2007. 53Betty Webb wanted Janelle Beattie to have the money because she had always been good to her. In those circumstances it could hardly be said to be unconscionable conduct on Janelle Beattie's part to retain the gift intended for her. 54I find that Betty Webb made a gift of the balance standing to her account with Uniting Financial Services and that the gift was perfected notwithstanding her intervening death. 55I will hear the parties on the appropriate form of orders with respect to the claim and the cross-claim and I will hear the parties on costs.