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Donatio Mortis Causa (DMC)

Donatio Mortis Causa

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Page 1: Donatio Mortis Causa

Donatio Mortis Causa (DMC)

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Definition• DMC is a latin term (deathbed gift)• It means a gift on the occasion of death• This is a gift that the donor makes when

he or she is contemplating the prospect of his or her imminent, though not necessarily certain, death.

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DMC Inter vivos gift- a gift that the donor makes when he

or she is contemplating the prospect of his or her imminent, though not necessarily certain, death.

- The gift is revocable, where it will

revert to the donor if the donor recover

- a voluntary and gratuitous transfer of property while the donor is still alive and not in expectation of death

- the donor no longer has any rights

to the property, and cannot get it back without the permission of the donee

DMC Testamentary gift- not made by will - made by will : procedures

under Wills Act 1959 are required to be comply with

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History of DMC• originated in Roman law where it appeared to

be the product of attempts to avoid the technical or formal elements of succession law.

• The Roman law permitted this transactions between husband and wife because these were gifts conferred during the course of a valid marriage.

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Elements of DMC4 conditions need to be fulfilled in order to create an effective DMC:a) It must be made in contemplation of

death.b) It must be made conditional on death.c) There must be delivery of the subject

matter of the gift.d) The subject matter is capable of passing.

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(a) Must be made upon contemplation of death (illness)

• the gift must be made upon contemplation of death specifically rather than merely reflecting that we all must die some day.

• The test here is subjective and the court may decide this question by having regard to the surrounding circumstances such as the injuries, or illness of the donor, or the fact that the donor was a patient in a hospital or etc.

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Wilkes v Allington

• the donor was suffering from an incurable disease (cancer) in 1922. Therefore, he made a several incomplete gifts to his nieces. In January 1928, after coming home from a market by a bus, he caught a chill and died of (pneumonia).

• Held : there was a valid donatio mortis causa eventhough the precise cause death was different to the contemplated cause.

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Thompson v Mechan

• The deceased, who was very apprehensive of flying, delivered the keys of his car and the vehicle permit to the plaintiff shortly before departing on a regular flight to Winnipeg. The deceased arrived safely, but died suddenly from a coronary thrombosis two days later whilst still in Winnipeg.

• Held : the risk of normal air travel did not satisfy the requirement of contemplation of death. It is not sufficient merely to recognise that death will occur sometime.

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Question : DMC when suicide?

• The answer used to be DMC was not valid in the case of suicide.

• Agnew v Belfast Banking Co and Re Dudman,Held : that a donatio mortis causa was not possible as that would be against public policy and its an offence.• However, in 1961 suicide is no longer a crime (Suicide Act 1961)• Thus, DMC is valid in a case of suicide.

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(b) Must be intended upon death (revocable)

• the gift must be intended upon death which means the intention of the donor is dependent on death.

• If the donor recovers, the gift is revocable.

• It will not be a valid DMC if the gift is intended to be an immediate gift.

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Tate v Hibert

• the deceased attempted to make an immediate and unconditional gifts to the nieces.

• The court ruled that an absolute gift to take effect immediately cannot be considered as donatio mortis causa.

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(c) Must be delivery of the subject matter to the donee (part dominion)

• there must be delivery of the subject matter to the donee and intention to part dominion over it.

• The donor must either hand over the thing to be given, or the documents which constitute the essential evidence of title, with the intention of surrendering dominion over the thing and not merely for safe keeping.

• Eg; key of the car, name title for the land and etc

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Woodard v Woodard (1995)• The father transferred a set of keys to his son. But

the father retained a set of keys to himself too. • The court held that, the important point to consider

was why the keys were retained. If the donor intended to keep the keys so that he can still used the car, then the third element was not fulfilled.

• In this case, there was a valid DMC as the third element was satisfied when the are evidence show that the donor had said to his son, “you can keep the keys, I won’t be driving anymore”.

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(d) The subject matter is capable of passing.

Stock & shares Cheques Bank accounts Real property ( chattels/ lands & etc..) Safety Deposit Box Furniture & Personal Effects

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(a) Cheques

• The donor’s cheques is a revocable order to the bank to pay the person in whose favour the cheque is drawn and is incapable of being the subject matter of a DMC.

• Payment of the cheque may be revoked during the lifetime of the donor and is revoked on death

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Re Beaumont• Mr Beaumont who was very ill and in fear of impending

death, on 19 February 1901 drew a cheque for 300 in favour of Mrs Ewbank, to whom it was delivered.

• Mrs E endorsed the cheque and on 23 February it was presented for payment at Mr B’s bank, where his account was overdrawn. The bank manager refused payment, stating that Mr. B’s alleged signature was unlike his ordinary signature and required confirmation of the genuineness of the signature.

• Mr B died on 25 February 1901 without the cheque having been cashed. Mrs E claimed that Mr B’s personal representatives ought to be compelled to complete her title on the ground of valid DMC.

• The court held that the cheque was a revocable mandate which was not a proper subject of a DMC.

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(b) Bank accounts

RAJALAKSHMI v. LIEW KIM YING CLJ 1987- The plaintiff was the sole administratrix of the estate of K.

Sathivelu (deceased). He prayed for a declaration that the sum of RM80,000 withdrawn by the defendants from 3 fixed deposit accounts, belongs to the estate as the defendants hold the money in trust for the estate.

- Based on evidence, the Court was more than satisfied that the defendants had rebutted the presumption that they held the moneys on trust for the deceased's estate and from this finding, the RM80,000 placed by the deceased in the 3 joint fixed deposit accounts passed to them by way of a donatio mortis causa.

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(c) Real property• For many years it was assumed, on the basis

of 19th century dicta, that land could not be the subject of a donatio mortis causa... In Duffield v Elwes, the court ruled that the registered land cannot be the subject of DMC

• However…in Sen v Hedley, the court held that land can be the subject of DMC.But its only restricted to unregistered land.

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Sen v Hedley

• Mr Hewett and Mrs Sen was husband and wife. In 1986 he was taken terminally ill, was admitted to hospital and knew that he did not had a long time.

• In the event of his death, he told his wife, ‘The house is yours, Margaret. You have the keys. They are in your bag. The deeds are in the steel box.’ Then he died intestate.

• The next of kin of Mr Hewitt claimed for the property. The court gave judgment to the next of kin of Mr. Hewitt

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• Then Mrs Sen appealed to the CoA.• The CoA ruled that in doing so (giving the key

to the steel box containing the title deeds of the deceased) , the deceased had indisputably made a gift of the house to the plaintiff in contemplation of his death to be effective on his death and his parting with the dominion over the title deeds to the house was sufficient to satisfy the third of the requirements necessary to establish a valid donatio mortis causa.

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(d) Safety Deposit BoxCostiniuk v. British Columbia (Official Administrator), • The deceased died intestate with no next of kin. During the last few years

of her life, the deceased had lived alone and was frequently ill. The plaintiffs, who had known her for many years, had greatly assisted her.The day before she died, in the presence of medical technicians, the deceased told the plaintiffs they were to have everything in the boxes. The safety deposit box contained stamps worth $2300, an RRSP receipt, and the state of title certificate for her home.

• The court found that handing over the keys to the safety deposit boxes did constitute effective delivery because the keys were essential to get possession of the contents of the boxes. Thus the contents of the box passed to the plaintiff as a valid donatio mortis causa. Only the stamps passed in title to the plaintiffs.

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(e) Furniture & Personal Effects Re Rosemergey • the deceased had employed her housekeeper for

many years. When she became ill and learned that her condition was terminal, the deceased had signed and delivered a paper giving her housekeeper all the furniture and personal effects in the house.

• The court held that there was a valid gift in contemplation of death even though there was no actual physical change of possession

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(f) Stock & shares

• It is often said that there cannot be a DMC of stocks and shares. This view is usually based on Ward v Turner. In this case the court held that there was no effective donatio mortis causa over some South Sea annuities. It is possible that the decision was based on an inadequate delivery.

• But in Staniland v Willott, it was held that shares in a public company can be subject to a donatio mortis causa.

• There remains some doubt in this area.

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Exceptions to the rule of equity ‘equity will not assist volunteer’ & ‘ equity will not perfect an imperfect gift’ :• Rule in Strong v Bird• DMC• Proprietary estoppel