Jensen v Mlynarik[2024] QSC 19

SUPREME COURT OF QUEENSLAND

1. [1]
   The applicant is the executor of his late mother’s will which is dated 28 September 2010 (“the will”). The deceased is survived by her three adult sons, the applicant, the respondent and Anthony Mlynarik (“Anthony”). Under the will, following the payment of expenses, the sons were gifted the whole of the deceased’s estate as tenants in common in equal shares. There are no eligible applicants for further provision out of the estate. The estate is now comprised of cash.
2. [2]
   The applicant applied for, inter alia, a declaration that the respondent has disclaimed his gift provided to him under the will. I made that declaration on 17 January 2024. These are my reasons.

Factual background

3. [3]
   Since in or about 1982, the respondent has lived in the United States of America. During 1984, the deceased, the applicant and Anthony were in California and the respondent travelled to visit them. That visit culminated in an argument between the deceased and the respondent. Since the argument, the applicant and Anthony have not seen, or heard from, the respondent. The deceased returned to the United States of America in the late 1990’s. During that visit, she met with the respondent’s former wife but had no contact with the respondent.
4. [4]
   The deceased died on 7 March 2019. Prior to her death, the applicant had made unsuccessful attempts to contact the respondent to advise him that the deceased was ill. On 5 April 2019, the applicant contacted the respondent’s former wife by telephone and was informed that she was no longer in contact with the respondent. The respondent’s former wife provided her last known contact information for the respondent, being a residential address (“the residential address”) and an email address (“the email address”).

5. [5]
   On 4 July 2019, the applicant was granted probate of the will. On 2 August 2019 the applicant’s solicitors sent a letter by email to the email address. The letter advised to the effect that the respondent was entitled to a one-third share of the deceased’s estate and that the applicant, as executor, intended to make an interim distribution. The letter also stated “…. we should be pleased if you could advise us of your best contact details and provide us with your bank details to enable us to make distributions from the [e]state directly to you”. There was no response.
6. [6]
   On 12 August 2019, the applicant’ solicitors sent a further letter by email to the email address advising that the interim distribution would be $75,000. Again, there was no response.
7. [7]
   In or about October 2019, foreign process servers engaged by the applicant’s solicitors were able to confirm that the residential address was the respondent’s last known address in the United States of America.
8. [8]
   On 6 February 2023, the applicant’s solicitors sent a further letter by email to the email address which advised that the estimated share of the estate payable to the respondent was $291,596.23 and again requested the respondent’s bank account details. There was no response.
9. [9]
   On 28 February 2023, the applicant’s solicitors sent a further letter by email to the email address. The letter stated that the applicant wished to finalise the administration of the estate. The letter materially invited the respondent to accept his one-third share of the estate and advised that the applicant wished to pay the respondent the amount of that share as soon as possible. The letter also outlined other options available to the respondent, including the possibility that he might disclaim the gift to him under the will. There was no response.
10. [10]
    The applicant’s solicitors then retained attorneys in California. On 8 March 2023, those Attorneys sent by certified mail, a letter addressed to the respondent at the residential address. The 8 March letter enclosed the 28 February correspondence. The 8 March letter was returned undelivered.
11. [11]
    On 13 October 2023, foreign process servers engaged by the applicant’s solicitors personally served the respondent at the residential address with a letter from the applicant’s solicitors dated 29 September 2023. The 29 September letter materially enclosed the will and grant of probate and advised the respondent of the amount of his gift under the will and that it could be paid to him immediately and there were “no conditions attaching to the gift”. The 29 September letter also enclosed a draft deed which gave effect to the respondent’s disclaimer of his gift if that course was to be preferred by the respondent. The letter recommended that the respondent should “obtain independent legal advice before [disclaiming his] interest and [signing] the deed.” Finally, the 29 September letter stated:

“If you either fail to provide details to enable your share to be paid to you or you do not sign the deed disclaiming your entitlement or otherwise communicate with us by 27 October 2023 our client will be left with no other alternative than to make an application to the Supreme Court of Queensland for an order that your share of the nett estate be distributed to [Anthony] and [the applicant] equally after first deducting the costs of the application to the court.

Further, if you do not respond by 27 October 2023 our client will rely upon your failure to respond as a basis for the Court drawing the inference that you disclaim (that is do not take) the gift.”

12. [12]
    The respondent did not respond to the 29 September letter.
13. [13]
    On 30 November 2023, the respondent was personally served at the residential address with, inter alia, sealed copies of the originating application and supporting affidavits and a notice required by rule 125 of the Uniform Civil Procedure Rules 1999 (“UCPR”).
14. [14]
    On 7 December 2023, the Originating Application came on for hearing. The hearing was adjourned because service had not occurred strictly in accordance with a time period imposed by r 129A of the UCPR. Following the adjourned hearing, the applicant’s solicitors engaged foreign process servers who, on 15 January 2023, personally served on the respondent at the residential address, a copy of the order of this Court made on 7 December 2023 together with a letter from the applicant’s solicitors to the respondent dated 8 December 2023.
15. [15]
    The 8 December materially provided:

“Dear Richard

RE: BS 14456/23 - JENSEN -V- MLYNARIK

….

… [T]he further hearing of the application has been adjourned until Wednesday, 17 January 2024 at 10.00 am (Australian Eastern Standard (or Brisbane) Time).

The application will be heard by the Supreme Court located at the Queen Elizabeth II Courts of Law, 415 George Street, Brisbane in the State of Queensland, Australia on the above date and at the stated time.

At the hearing on the next occasion (17 January 2024), our client, [the applicant], in his capacity as Executor of your late mother’s Estate shall ask the Court to make the following declarations and orders:

THE COURT DECLARES THAT:

1. The Respondent, Richard Julius Mlynarik, has disclaimed the gift provided to him under the will of the late Doris Winifred Mlynarik dated 28 September 2010, for which will a Grant of Probate was made by the Court in proceeding number S 5857 of 2019 on 4 July 2019 (the Will).

FURTHER, THE COURT ORDERS THAT:

2. The Applicant shall pay such sum as is due and payable to the Respondent, Richard Julius Mlynarik, under the Will to each of Christopher Marten Jensen and Anthony James Mlynarik, being the other residuary beneficiaries named in the Will, in equal shares.

3. The Applicant be paid his costs of this application out of the estate on the indemnity basis.

Should you fail to appear at the hearing, whether in person, or by a legal practitioner then the Court may proceed to grant the relief sought by Christopher and make the above orders.

We strongly recommend that you obtain independent legal representation, and provide a copy of this letter and all other correspondence and court documents sent to you or served upon you to your legal representatives attention urgently.

Equally, you may contact us directly if you do not have legal representation.”

16. [16]
    The respondent did not respond to the 8 December letter.

Principles relating to disclaimer

17. [17]
    Fundamentally, the disclaimer of a gift involves a refusal to accept that an interest has been bequeathed.^[1] The disclaimer must be made with knowledge of the gift and an intention to disclaim it.^[2] Unless and until a gift is disclaimed, the law will presume that a donee assents to the gift.^[3] The presumption has been described as a strong one^[4] and the onus rests on an applicant to prove the disclaimer. However, the law in this area is concerned with matters of substance, not form, and it has been observed that “the law is certainly not so absurd as to force a man to take an estate against his will”.^[5]
18. [18]
    In an often-cited^[6] academic paper,^[7] Professor Crago has observed:

“ … there is no generally applicable form of disclaimer required by the law. A disclaimer may be made by any means effective for the purpose; by deed or other writing, such as a letter; by word of mouth; or by conduct. The essential feature is not the form but the substance, namely an effective communication, by whatever means, rejecting ownership of the subject-matter of the proffered gift that is both timely and peremptory.”^[8]

19. [19]
    Professor Crago’s article has also been cited in support of the proposition that three requirements must be satisfied to establish a disclaimer. In Re Bisset,^[9] Mullins J distilled those requirements in the following passage:

“The applicants and the first respondent rely on the article by Professor Crago, Principles of Disclaimer of Gifts (1999) 28 WALR 65 that suggests three requirements for a disclaimer of a gift to be effective:

1. the disclaimer must be timely in that it must occur before any act constituting assent to a gift (at 76);
2. the disclaimer must be peremptory, in that it must constitute an absolute rejection of the gift (at 78);
3.  the disclaimer must be communicated to the donor or the donor’s agent (at 79).”

20. [20]
    In Federal Commissioner of Taxation v Cornell,^[10] Latham CJ found that a letter sent on behalf of a beneficiary evidenced a “clear and decisive refusal” sufficient to establish a disclaimer of a trust.^[11] In the following passage, the Chief Justice referenced with approval a number of earlier authorities:^[12]

“ … Holroyd J. in Townson v Tickell [(1819) 3 B & Ald 31 at p 38; 106 ER 575 at p 577] said (speaking of a devise) :-‘I think that an estate cannot be forced on a man. A devise, however, being prima facie for the devisee’s benefit, he is supposed to assent to it, until he does some act to show his dissent. The law presumes that he will assent until the contrary be proved; when the contrary, however, is proved, it shows that he never did assent to the devise, and, consequently, that the estate never was in him.’ Best J. said [(1819) 3 B & Ald 31 at p 39; 106 ER 575 at p 578];- ‘It seems to be contrary to common sense to say, that an estate should vest in a man not assenting to it: there must be the assent of the party, before any interest in the property can pass to him.’ The same case shows that the dissent need not be evidenced by disclaimer in a court of record or by deed; any evidence of actual dissent is sufficient.”

21. [21]
    Whilst in FCT v Cornell the clear and decisive refusal was evidenced by a letter, the concept of actual dissent is not limited to situations of written or oral refusals to accept a gift. Absent a written or oral refusal to accept a gift, the conduct of a beneficiary still falls to be considered in its entirety for the purpose of ascertaining whether that conduct evidences a clear and decisive refusal.
22. [22]
    In Public Trustee v Attorney-General for New South Wales,^[13] Powell J observed:

“It, of course, goes without saying that no-one can be compelled to accept the benefit of a legacy, bequest or devise, and that, if so minded, a legatee or devisee may effectively renounce or disclaim the intended legacy, bequest or devise. Such a renunciation or disclaimer need not, as I understand it, in order to be effective, be attended by any formal ritual or be evidenced in any formal document, such as a deed, but may be communicated to the Trustee in a less formal manner. However, I apprehend that conduct — such as ignoring enquiries or letters from the Trustee — falling short of an express statement amounting to, or necessarily implying, an intention to renounce, or disclaim, the intended benefit would not be regarded as a renunciation or a disclaimer.”

23. [23]
    This passage acknowledges that, in some cases, conduct may necessarily imply a disclaimer. The passage also suggests that merely ignoring inquiries or letters from a trustee might fall short of the definitive conduct required to establish a disclaimer. However, each case must depend on its own particular facts. As the law in this area is concerned with matters of substance and not form, in particular circumstances, a failure to act or respond may constitute a disclaimer where continuing inaction and silence necessarily implies, or is only consistent with, the refusal of a gift.

Disclaimer established

24. [24]
    The respondent has been provided with clear notice of the gift and its amount. There has been no conduct by the respondent constituting assent to the gift.
25. [25]
    The real issue is whether, from 13 October 2023, the respondent’s continuing failure to take any action or steps in response to his being served with the 29 September letter and then the originating application, supporting affidavits and the 8 December letter, constitutes conduct evidencing a clear and decisive refusal to accept his gift under the will.
26. [26]
    From 13 October 2023, the respondent was not only aware of the amount of the gift made to him under the will but also that there were no conditions attaching to the gift and that the gift could be paid to him immediately. The respondent made no contact with the applicant’s solicitors to claim the gift. The respondent acted in that manner with knowledge that his failure to make contact was to be relied upon as a basis for a submission to this Court that, by inference, he had disclaimed the gift. The respondent was then served with court documents which revealed to him that this Court was in fact being moved for relief based upon his continuing inaction.
27. [27]
    The facts of this case did not involve a mere failure to respond. Rather, the facts of this case included circumstances from which the failure to respond could only be interpreted as a disclaimer. The relevant circumstances were the long history of familial estrangement, the relevant correspondence having come to the actual attention of the respondent and that correspondence having advised the respondent, in the clearest of terms, that his continuing inaction was intended to be, and was being relied upon as evidencing rejection of the gift. In those circumstances, the respondent elected to ignore the correspondence, and took none of the steps outlined in the correspondence. That conduct, engaged in with knowledge of the gift and how the conduct would be interpreted and relied upon, amounted to a peremptory, dogmatic refusal of the gift. In the present case, the only inference able to be drawn from the respondent’s continuing inaction and failure to respond, is that he has refused to accept the interest bequeathed to him.