Northern Territory Second Reading Speeches

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FAMILY PROVISION AMENDMENT BILL 2000

Mr Speaker, I move that the bills be now read a second time.

The purpose of the Wills Bill 2000 is to repeal and replace the Wills Act 1938, as amended, so as to clarify, amend and reform the law in the Northern Territory with regard to the making, alteration, rectification, revocation and construction of wills. This bill contains significant innovations concerning the making of wills by children and other persons lacking testamentary capacity, and the effect of marriage and divorce on wills.

Wills legislation affects everyone and underpins many social arrangements. Because of the significance of this legislation I will devote some time to outline the history of the legislation, the development of the reforms, and the reforms themselves.

Wills legislation has remained much the same as it was at the time of the enactment of the Imperial Wills Act of 1837. That act was adopted as local law by the various Australian colonies in the period after 1837. The Northern Territory inherited the South Australian Wills Act 1842. The current Northern Territory Wills legislation was enacted in 1938. It did little more than consolidate the old South Australian acts dating from 1842.

There are two areas of concern with the current Wills Act. Firstly, development in other laws and changes in social arrangements means that some of the principles in the act are out of step with current legal and social policies. For example, the act contains strict, often inflexible rules regarding the making of wills. Modern law usually permits greater flexibility in ensuring the meeting of reasonable expectations of individuals. Secondly, the law in the Northern Territory differs from that in place in most other Australian states and territories. We have not adopted reforms made elsewhere. This could lead to significant problems and idiosyncratic outcomes. This happens because the law regarding succession operates and the applicable law may vary depending on the place of the death, or the place or location of the property.

Territorians often die leaving estates having property located in other parts of Australia. The administration of estates may be complicated if various parts of the estate are administered under differing state and territory laws. Such laws can affect matters such as the validity of a will, or the effect of marriage or divorce on a will.

Attempts have been made since the mid 1960s by Attorneys-General to simplify Australia’s succession laws. There was limited success, even for matters as simple as acceptance by the courts of grants of probate, or administration issued by other Australian courts.

In 1990, the Northern Territory Law Reform committee proposed the need for the law of succession to be uniform around Australia. This proposal was taken up by the Australasian Law Reform Agency’s conference in 1991, and it was referred to the Standing Committee of Attorneys-General. The Australian Attorneys-General accepted the need to develop model law dealing with succession in 1991. Accordingly, thy established the uniform succession laws project and appointed the Queensland Law Reform Commission as the agency responsible for developing the reforms.

The Uniform Succession Laws project involved the Queensland Law Reform Commission supporting a committee comprising succession law experts, various law reform agencies and representatives from state and territory legal policy agencies. This committee, known as the National Committee for Uniform Succession Laws, is responsible for the development of model bills on matters such as the Law of Wills, which law deals with the requirement to be followed by a person who has formed an intention about what should happen to his or her property following death. The Law of Family Provision considers which law permits the courts to ensure, in limited circumstances that the deceased person’s estate makes appropriate provision for dependant members of his or her family. The law relating to administration of estates, which law sets out the practices and procedures to be followed by the courts and others in the administration of estates. The law relating to the distribution of property when a person dies without leaving a valid will. The law relating to the recognition of grants of probate and administration made outside of the local state or territory.

In December 1997, the National Committee for Uniform Succession Laws released its report entitled ‘Consolidated Report to the Standing Committee of Attorneys-General on the Law of Wills’. This report contained model legislation to be used as the basis for reform by individual states and territories.

The Northern Territory Law Reform Committee has examined the national uniform bill. In 1999, it presented to the government its report entitled ‘Report on Proposals for the Reform of the Laws of Wills in the Northern Territory’. The committee recommended that the uniform bill be adopted in the Northern Territory. The government has accepted the recommendation of the Northern Territory Law Reform Committee.

The Wills Bill 2000 is closely based on the uniform Wills Bill. The Territory bills make the following reforms to the laws of the Northern Territory.

Wills by Children. It is a general rule that a person under the age of 18 years lacks the capacity to make a will. One of the reasons for this rule is that a child may lack the maturity to make a responsible will. This can be so despite the fact that many persons under the age of 18 are well aware of the function of a will and of the practical need to make a will. The National Committee considered whether there should be a lowering of the age from 18 years to some other age, however it could not identify any real need to change the age. The government accepts this approach.

The outcome of the current rule concerning children is that the property of a deceased child be distributed in accordance with the Laws of Intestacy. The relevant provisions are contained in the Administration and Probate Act. Depending on the circumstances of the child, the property will be inherited by the child’s spouse, the child’s children, or the child’s parents. Such inheritance occurs regardless of the state of the personal relationships between the child and these other people at the time of the death of the child.

However, it is recognised that occasions may arise when it is desirable to allow a person aged under 18 years to make a will. This is particularly so when it would be unfair to allow the intestacy rules to take their course, or where a testator’s family maintenance application under the Family Provision Act is not available. For example, a child may have been abandoned by one or both parents and raised by a carer or some other family member. The child should be able to leave his or her estate to such a person. The bill addresses this issue by providing two exceptions to the general rule preventing will making by a child The first exception permits wills by married children. The second exception is to enable the Supreme Court to authorise the making of a will by a child.

Wills made by married children. Under the bill a will may be made by a married child or a child in contemplation of a marriage. Such wills will also be able to be revoked and altered. A child who has been married will be able to revoke a will that was made while the child was married or in contemplation of marriage. The exception for children contemplating marriage is based on the view that when a person marries he or she undertakes wholly new obligations to the married partner which should be able to be expressed in a testamentary capacity.

Court-authorised wills for children. Under the bill, the Supreme Court may make an order authorising the making of a will by a child in terms approved by the court. Similarly the court may revoke a will. In giving such an authorisation the court must be satisfied that the proposed will or revocation accurately reflects the intentions of the child and it is reasonable in all circumstances that the order should be made.

Wills for persons lacking testamentary capacity. Testamentary capacity is considered essential for the making of a valid will. The concept of capacity requires that a person has sound mind, memory and understanding at the time the will is made. Lack of testamentary capacity can exist in a number of situations - for example, where a person makes a valid will and subsequently loses testamentary capacity, where a person who has testamentary capacity never makes a valid will and subsequently loses testamentary capacity, and where a person never has testamentary capacity and never makes a valid will.

In the case where a person loses testamentary capacity there is currently no means of changing the will if the person’s circumstances change. For example, if a child is born who is not included in the will, in such a case the only current remedy is to take potentially expensive legal action under the Family Provision Act. Where a person without a will does not have testamentary capacity, the property of his or her estate could be distributed according to the rules of intestacy, subject only to the possibility of action under the Family Provision Act.

In order to provide for a fairer means of dealing with the property of persons who lack testamentary capacity, the bill gives the Supreme Court the power to make an order authorising the making of a will or the revocation of a will on behalf of the person lacking testamentary capacity. Such persons include children. The bill requires the court, before making any order in relation to a person lacking testamentary capacity, to be satisfied of certain matters. These include that the person for whom the statutory will is to made or revoked does not have the testamentary capacity, that the proposed will or revocation accurately reflects the likely intentions of the person for whom the will is sought to be made, and that it is reasonable in all circumstances for the court to authorise the making or revocation of a will.

The bill contains elaborate requirements concerning the making of wills under the direction of the court. Additionally, such wills must be deposited with a prescribed person or persons and may only be withdrawn in very limited circumstances from such a deposit.

The effects of divorce on a will. At present a will is not revoked in the Northern Territory merely because a marriage has ended. The wills of formerly married persons survive divorce. However, findings by numerous Australian and overseas law reform bodies have concluded that in the majority of cases testators would not wish their wills to benefit former spouses. Accordingly this bill attempts to put in place what is assumed to be the likely intention of most divorced persons. It provides that upon the ending of a marriage by divorce or annulment dispositions in the will to the former spouse are revoked, any appointment under the will of the former spouse is revoked, and any grant of a power of appointment exercisable by or in favour of the testator’s spouse is revoked.

These revocations are subject to a contrary intention. This provision operates to the effect that any property is to pass as if the former spouse had died before the testator. However, the provision is not conclusive. It does not operate so as to revoke certain parts of wills such as appointments regarding trust property for beneficiaries that include the spouse’s children and grants of appointments that exclusively concern the children of the testator and the former spouse. The revocation of all dispositions, powers of appointment and appointments to the former spouse will not affect any rights of the former spouse under the Family Provision Act. This proposal represents a major reform in this area of succession law in the Northern Territory. I anticipate that it will arouse community interest and I look forward to further discussions on the issue.

Dispensing with the requirement for the formal execution of a Will. Under the present law, strict compliance with the execution formalities is required. This can mean that a failure to make a will in conformity with the formal requirements, however slight, will result in invalidation of the will. For example, if the testator inadvertently forgot to sign the will, witnesses inadvertently forgot to sign the will, the husband or wife inadvertently signed the will prepared for the other, or the testator was too sick to turn his or her head and watch the witness sign, even though they were all present in the same room at the time of signing. the will would be invalid under the present act. The application of this rule creates unfair or unintended results. A document which for all purposes reflects the intentions of a testator is rendered invalid due an oversight or inadvertent error. In such situations the deceased estate would be distributed under the rules of intestacy. It may benefit people whom the testator has no intention of benefiting under the terms of his or her will. In order to address this issue, the bill enables the court to admit to probate as the will of a deceased person certain documents which have not been properly executed. The court must be satisfied the deceased intended the documents to constitute his or her will.

Introduction of a 30-day rule of survivorship of beneficiaries. The bill provides for the introduction of a rebuttable requirement that a beneficiary survive a testator by 30 days. This statutory rule is to be enacted so as to avoid unnecessary dual administration of the same property. Such administration can occur where two or more people who are the main beneficiaries in each other’s wills die at about the same time. An example is where a husband and wife die as a result of a common accident such as a car smash. In such a case the estate of each is, in the absence of a contrary intention of the wills, administered as if each had died before the other. This means that the wife’s property will be distributed in accordance with her will and the husband’s property in accordance with his will. Under current law all of the property would be dealt with under whomever, the wife or the husband, happens to live the longest. This could have unfortunate consequences for those cases where there are stepchildren. This proposed statutory rule will reinforce clauses that are usually inserted into wills executed in the Northern Territory. Thus for most people with properly thought-out wills there will be no substantive change. Additionally, the provision will operate subject to a contrary intention that a testator may include in his or her will.

Wills Registry. Following amendments made in 1987, the Wills Registry in the Northern Territory is maintained by the Public Trustee in accordance with sections 88B and 88C of the Public Trustee Act. The bill departs from the model bill concerning responsibility for Wills Registry. The model bill provides that the registry is to be maintained by the court through the Registrar of Probates. The bill provides that the Public Trustee is to continue to be the prescribed person for the holding of the Wills Registry. However, regulations can be made for the purpose of shifting this responsibility.

Application of act to wills made before commencement. In general terms this bill only applies to wills executed on or after the commencement of the act. Wills executed before commencement continue to be subject to the wills act in force immediately before the act’s commencement. However, there are some exceptions to this general rule. The new legislation will apply to all wills in respect of issues concerning capacity, formal requirements of execution, revocation of a will, rectification of a will by a court and construction of a will. Furthermore, the new act’s provisions concerning the effect of divorce and annulment apply to all marriages that end on or after commencement of the act.

The new act will apply to these matters in a retrospective manner because these provisions are remedial. They are designed to give effect to rather than hinder testamentary acts and intentions. This is consistent with the policy position that the intentions of the testator should be followed where practically possible. Not all of the remedial provisions have been made retrospective. This is because testators may have made their wills with knowledge of the law and without expressed contrary intention. An example of such a provision is the provision dealing with the 30-day rule concerning survivorship of beneficiaries, outlined above. Some testators may have taken account of the existing law and not included an intention to exclude that provision. To make these provisions retrospective may defeat the intention of the testator.

The bill also implements the following reforms. Modification of the interested witness rule. The bill makes clear that the person who witnesses a will or that person’s spouse at that time is not always disqualified from taking a benefit under the will. Relaxation of the former requirements in the execution of a will. A valid will still requires the signature of a testator or by some other person in the presence of and at the direction of the testator, in the presence of two or more witnesses. The requirement that a will be signed at the foot of a will has been discarded. However, the testator is still required to sign the will with the intention of executing the will. Abolition of the special requirement relating to the wills of soldiers and naval officers.

The wills of soldiers and naval officers are privileged in that they are exempt from many of the formal requirements for the valid execution of a will. The basis of this rule is that soldiers at war and naval officers are without the benefit of an appropriate legal advice in the making of their wills. These days all branches of the Australian Defence Force actively encourage personnel to make a will and provide free legal assistance to facilitate this outcome. Providing for the admittance of extrinsic evidence where any part of a will is meaningless or any of the language used in the will is ambiguous or uncertain and providing the court with the power to rectify a will where it is satisfied that the will does not reflect the testator’s intentions because of a clerical error or an error by the solicitor or other person when preparing the document.

The bill reforms succession law in the Northern Territory for the more accessible, simpler and practical Wills Act. More people will be encouraged to make their wills and when made, their wills are more likely to operate so as to reflect their actual intentions. The adoption of the proposals in the model bill will modernise the Northern Territory’s succession laws and will bring about greater uniformity with the law in the other jurisdictions.

The Public Trustee Amendment Bill 2000, Law of Property Amendment Bill 2000 and the Family Provision Bill 2000 make amendments consequential to the proposals in the Wills Bill 2000. I commend the bill to honourable members.

 

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