Extending Equity s Reach through the Mutual Wills Doctrine?

AuthorC.E.F. Rickett
Publication Date01 Jul 1991
DOIhttp://doi.org/10.1111/j.1468-2230.1991.tb00910.x
July
19911
Directors
Duties and Insolvent Companies
J
of these submissions may go some way to halting the growing expectations of
corporate creditors and the understandable anxiety felt by directors who try
to
save
the company.
Extending Equity’s Reach through the
Mutual Wills Doctrine?
C.
E.
F.
Rickett
*
What are the requirements for the operation of the equitable mutual wills doctrine,
whereby a remedial constructive trust can be imposed by a court?
A
useful summary
is the statement of Culliton
JA
in
Re
Johnson’:
It
appears
to
me that
. . .
where there are mutual wills, a trust enforceable in equity against
the estate
of
the survivor where the
.
.
.
mutual will has been revoked by the survivor can
only be established
if
there
is
fraud:
(I)
that such
. .
.
mutual wills were made pursuant
to
a definite agreement or contract not only
to
make such
.
.
.
will but also that the survivor
shall not revoke; and
(2)
such an agreement
is
found with preciseness and certainty, from
all of the evidence; and
(3)
the survivor has taken advantage
of
the provisions of the
.
.
.
mutual will.
This statement has been doubted as
to
its accuracy in suggesting the need for a ‘definite
agreement’ (ie express) that the wills not be revoked.* It is also clear that by
‘taking advantage’ is meant not necessarily the receipt of a material benefit by the
survivor, but rather the survivor’s obtaining the benefit of a deceased’s performance
of the latter’s contractual obligation.3
What
is
important for the purposes of the present note
is
the reference
to
‘the
survivor.
The equitable doctrine, and hence the equitable remedy available, operates
only from the point of the death of one party to the agreement where that party
has now irrevocably performed his or her obligation under that agreement to provide
for a particular distribution of his or her property. The corresponding obligation
of the surviving party should now be performed,
if
not voluntarily then coercively
-
hence the remedial constructive trust remedya4
The trust can be imposed at the request of the deceased’s representatives
-
justifiable on the basis of preventing equitable fraud on
the
deceased as promisee
under the agreement
-
or the ‘beneficiaries’ of the dispositions under the survivor’s
will
as found
in
the agreement -justifiable perhaps on the basis of an anti-enrichment
fiduciary duty, to carry out the terms of the agreement, owed by the survivor
to
the third parties.5
Viewed against this background, the decision of McPherson
J
in the Queensland
Supreme Court in
Bigg
v
Queenslund
Trustees
Ltd6
is of considerable interest. Mr
and Mrs Bigg executed mutual wills within a week
of
their marriage. His Honour
~ ~~~
*
Professor
of
Business Law, Massey Univcrsity.
I
2
3
i6id
at pp185-187.
4
See
Re
Cleaver. [I9811
I
WLR
939.
5
See
C.E.F.
Rickett, ‘Mutual
Wills
and
the
Law
of
Restitution’
(1989)
105
LQR
534.
6
119901
2 Qd
R
11.
(1957)
8 DLR (2d) 221 at p247.
See
C.E.F.
Rickett,
‘A Rare Case
of
Mutual Wills and
Its
Implications‘ (1982) 8 Adelaide LR 178
at
pp180-185.
58
1

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