Posted on July 10, 2023 by Cheapest Assignment

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In Equity, there is only ONE ASSIGNMENT. This assignment is compulsory and must be submitted by all students. The assignment will constitute 20% of the final mark in this subject.

Assignments must be submitted by the due date unless an extension has been granted. Extensions need to be requested by email prior to the assignment due date and specific supporting evidence provided. Late assignments attract a penalty of one mark out of 20, or 5% of the total marks available, per day. A pass mark is 50%. Assignments that are received more than ten days after the published due date will not be accepted. Please note that students granted an extension must still submit their assignment within ten days of the original assignment due date.

Assignments are assessed according to the “Assignment Grading and Assessment Criteria” outlined in the Good Assignment Guide. This guide also contains the rules and guidelines regarding the presentation of assignments and instructions on how to submit an assignment and is available from the Guides and Policies section of Canvas.  Please read this guide carefully before completing and submitting this assignment.

 Any submission which uses the ideas of others without attribution, or fails to reference properly the words and ideas of others, or which has been prepared – in whole or in part – by someone other than the student, will be regarded as plagiarism – and severe consequences apply. Students must acknowledge any assistance provided in preparing this assignment, including the use of automated writing tools, artificial intelligence (AI), reference generators, and translation software.

 The maximum word limit for the assignment is 2000 words (excluding citation footnotes and bibliography).

Completed assignments should be lodged through Canvas and received by 11:59pm AEST (Australian Eastern Standard Time) on Wednesday.

Assignment Question

On 16 November 2022, Kramer J of the Supreme Court of New South Wales made orders in three cases related to the deceased estate of Art van der Lay. Appeals against his Honour’s orders in all three cases were subsequently heard by the New South Wales Court of Appeal, which, on 27 April 2023, handed down its decision in Re: Estate of the late Art van der Lay [2023] NSWCA 9999.

The relevant facts in the three cases were set out in the following parts of the Court of Appeal’s joint judgment:

[6] The issues to be determined by this Court arise out of appeals in three separate proceedings in relation to the estate and business affairs of the late Art van der Lay who died on 22 July 2021. The first of the proceedings concerned the validity and effect of certain provisions in Mr van der Lay’s will. The second concerned a claim by Ralph Mellish to certain royalties paid to Mr van der Lay prior to his death in relation to his best-selling book, Nothing Happened, in which he detailed his failed attempt to be elected to the Legislative Assembly in New South Wales. The third concerned a claim for equitable compensation against Mr van der Lay initiated by his former business associate, Lester Gruber. The trial judge in all of these cases was Kramer J.

[7] The relevant facts for this Court to consider are, mercifully, relatively brief and straight forward.

[8] Mr van der Lay was born in Gosford in New South Wales in 1945. He was an only child. At the age of 8, his parents were tragically killed in an automobile accident. For the next 10 years he lived as an orphan at St Vincent’s Orphanage at Terrigal in New South Wales. From the mid-1960s and through to his death, Mr van der Lay lived in Sydney where he made a substantial fortune as a manufacturer of latex. Mr van der Lay never married and had no children.

[9] On 25 May 1990, Mr van der Lay executed a will in which he appointed his life-long friend and business partner, Claude Pennypacker as his executor and trustee.

[10] By the terms of Clause 2 of his will, Mr van der Lay left $100,000 ‘to the Lady Llanover Society to be used for its purposes’.

[11] The Lady Llanover Society is an incorporated association in New South Wales with the stated aim of improving the overall health of Australians by the means of having the sale and consumption of alcohol prohibited by law. Against this background, the Society is engaged in extensive lobbying of opinion-making elites in this country as well as sponsoring extensive public information campaigns explaining the negative health consequences associated with the consumption of alcohol.

[12] By Clause 3 of his will, Mr van der Lay left $500,000 to ‘the religious Order of the Sisters of Mercy in the State of New South to be used for the religious purposes of St Vincent’s Orphanage conducted by the Order at Terrigal in New South Wales’.

[13] St Vincent’s Orphanage was established by the Sisters of Mercy in 1877, but its operation came to an end in 2019. Its assets were sold and all proceeds were then applied to a corporation wholly owned by the Sisters of Mercy named Family Rising Ltd. Family Rising Ltd is a for-profit company which offers family counseling and advice services. In the corporation’s constitution, Article 3 states: ‘The purposes of this corporation are to improve and strengthen family life’. All profits from the corporation are fed back to the Sisters of Mercy.

[14] By the terms of Clause 4 of his will, Mr van der Lay left the residue of his estate to Lloyd Costanza.

[15] In relation to the provisions of Clauses 2 and 3 of Mr van der Lay’s will, Kramer J held: (i) that, on the basis of the political objectives of the Lady Llanover Society, the gift set out in Clause 2 lapsed as it was not a valid charitable bequest, and (ii) that, in relation to Clause 3, the gift lapsed because the St Vincent’s Orphanage had ceased to exist and a cy-pres scheme in favour of Family Rising Ltd could not be ordered in relation to the bequest. Appeals against both of these orders have been made to this Court by Mr Pennypacker as executor of Mr Van der Lay’s estate.

[16] In relation to the proceedings initiated by Mr Mellish, on 21 May 2021, Mr van der Lay sent an email to his former political advisor Larry Braun in which he wrote: ‘I give to you the royalties for the current financial year which I am entitled to receive in relation to Nothing Happened’. Two days later, Mr Braun telephoned Mr van der Lay and said: ‘When you receive the royalties, hold them on trust for Ralph Mellish’. Royalties for the 2020-2021 financial year, in the sum of $6,540, were paid into Mr van der Lay’s bank account with Eastpac Bank Ltd on 18 July 2021. On the basis of these facts, Kramer J ruled that Mr Mellish had no claim to the royalties and that they passed to Mr Costanza, the residuary beneficiary named in Mr van der Lay’s will. An appeal to this court against this ruling is made by Mr Mellish.

[17] In relation to the proceedings initiated by Mr Gruber ten days before Mr van der Lay’s death, Kramer J made orders to the effect that Mr van der Lay pay equitable compensation to Mr Gruber in the sum of $250,000 for breach of fiduciary obligations owed to Mr Gruber. In this case, Mr Gruber had sought, as part of his claim, exemplary damages in relation to the breaches of fiduciary duty. His Honour ruled that, if such damages were available for breaches of fiduciary obligations, Mr van der Lay’s breaches were of a seriousness and kind that would have justified $50,000 being awarded as exemplary damages. However, Kramer J noted that exemplary damages were not available for breaches of equitable obligations and that any change in the law on that matter could only be made by the High Court. On this basis, his Honour rejected Mr Gruber’s claim in so far as it related to exemplary damages. An appeal to this court against this ruling is made by Mr Gruber.

Following a lengthy analysis of relevant legal principles, the Court of Appeal upheld all of the orders made by Kramer J. Following the Court of Appeal decision, appeals against all of its rulings were filed and are set down for hearing before the High Court of Australia in early 2024.

The editor of Legal Matters, a popular legal publication, seeks your views on what will, or should, be the High Court’s rulings on these appeals.

Note: Marks for the assignment are allocated as follows: Clause 2 (20 marks); Clause 3 (20 marks); Mellish’s claim (30 marks); and Gruber’s claim (30 marks). The mark out of 100 will then be converted to a final mark out of 20.

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