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O'Brien v Smith

 

[2012] QSC 166

Reported at [2013] 1 Qd R 223

 

SUPREME COURT OF QUEENSLAND

 

PARTIES:

FILE NO/S:

Trial

PROCEEDING:

Originating application

DELIVERED ON:

19 June 2012

DELIVERED AT:

Brisbane 

HEARING DATE:

26 March 2012

JUDGE:

Margaret Wilson J

ORDER:

1.That there be a declaration that upon the proper construction of clause 4 of the will of Jack Jones deceased dated 31 October 2006 there is an intestacy as to the deceased’s residuary estate created by the words:

OTHER than the gifts and bequests set out in Clause 3 of this my Will I GIVE, DEVISE AND BEQUEATH the balance, rest, remainder and residue of my estate to a trust or other entity to be set up by my Executors and Administrators and administered by them as they shall see fit.

Monies may be applied to Education of all my Grandchildren and allocated as my Executors shall see fit. Monies may be invested as my Executors shall see fit. On my death, my Executors may sell or dispose of properties as they see fit. All gifts and bequests as set out in Clause 3 to be distributed at times as seen fit by the Executors. Loans may be made to those whose ability to repay such loans is proved.”

2.That the costs of the applicants, the first respondent and the second respondent of and incidental to this application, including reserved costs if any, be assessed on the indemnity basis and paid out of the deceased’s estate.

CATCHWORDS:

SUCCESSION – WILLS, PROBATE AND ADMINISTRATION – CONSTRUCTION AND EFFECT OF TESTAMENTARY DISPOSITIONS – GIFT TO TRUSTEES – BENEFICIARIES OF TRUST – where testator left a homemade will and an estate with a net value in excess of $3,260,000 – where application made for declaratory relief as to the proper construction of clause 4 of the will – where testamentary disposition to establish a trust administered as the executors ‘shall see fit’ – whether a valid trust was created under the will – whether beneficiaries of the trust were defined with sufficient certainty to satisfy “criterion certainty” – whether the trust the deceased purported to create failed for want of beneficiaries – whether a partial intestacy created 

SUCCESSION – WILLS, PROBATE AND ADMINISTRATION – CONSTRUCTION AND THE EFFECT OF TESTAMENTARY DISPOSITIONS – ADMISSIBILITY OF EXTRINSIC EVIDENCE – admissibility of evidence of factual matrix – “armchair rule” – admissibility of evidence to determine deceased’s intention – section 33C Succession Act 1981 (Qld)

Succession Act 1981 (Qld), s 33C, s 33R.

Perrin v Morgan [1943] AC 399, 420; [1943] 1 All ER 187, cited.

The Public Trustee of Queensland v Smith [2009] 1 Qd R 26, cited.

The Trust Company Limited v Zdilar & ors [2011] QSC 5, cited.

COUNSEL:

R M Treston for the applicants

C A Brewer for the respondent (the litigation guardian of the deceased’s infant grandchildren)

I Klevansky for the second respondent

SOLICITORS:

Delaney & Delaney for the applicants

McInnes Wilson Lawyers for the respondent

Michael Singh Lawyers for the second respondent

[1] MARGARET WILSON J: Jack Jones (“the deceased”) died on 9 February 2010, leaving an estate with a net value in excess of $3,260,000.

[2] The deceased left a homemade will dated 31 October 2006. There has not yet been a grant of probate of the will.

[3] This is an application for declaratory relief as to the proper construction of clause 4, which related to the disposition of the deceased’s residuary estate. It was heard in the Applications List.

Background

[4] The deceased was aged 81 years at his death. He was survived by five adult children – two sons and three daughters then aged between 56 and 46 years, and 18 grandchildren – 12 of whom are now adults and six still infants.

[5] The applicants, who are the executors of the will, are one of his daughters and one of his granddaughters. The first respondent is the litigation guardian of the infant grandchildren. The application was served on the first respondent and the other children and adult grandchildren; the second respondent, who is one of the deceased’s daughters, appeared on the first return date and on the substantive hearing.

The will

[6] By clause 3 of his will, the deceased made the following specific bequests:

$  30,000Peter John Jones (son)

$   1,000Janice Margaret Reinecker (daughter – the second respondent)

$  30,000Susan Mary Waters (daughter)

$  30,000Elizabeth Anne O’Brien (daughter – one of the applicants)

$  30,000David Thomas Jones (son)

$  25,000Deborah Judas (friend)

$146,000

[7] Clause 4 provided:

“4.  OTHER than the gifts and bequests set out in Clause 3 of this my Will I GIVE, DEVISE AND BEQUEATH the balance, rest, remainder and residue of my estate to a trust or other entity to be set up by my Executors and Administrators and administered by them as they shall see fit.

Monies may be applied to Education of all my Grandchildren and allocated as my Executors shall see fit.  Monies may be invested as my Executors shall see fit.  On my death, my Executors may sell or dispose of properties as they see fit. All gifts and bequests as set out in Clause 3 to be distributed at times as seen fit by Executors. Loans may be made to those whose ability to repay such loans is proved.

To my granddaughter BRONWYN JANE JONES I GIVE the NOROTAKI [sic] DINNER SERVICE in its complete set. All my other personal effects shall be distributed to family members.”

The parties’ respective positions

[8] The primary submission made on behalf of the executors was that there is an intestacy as to the residuary estate. The deceased purported to establish a trust for the distribution of his residuary estate, but he did not identify the beneficiaries of that trust or provide any means by which the beneficiaries could be ascertained.  Accordingly the trust failed.

[9] Consistently with the duty of counsel for the personal representatives to assist the Court by putting forward all reasonably arguable constructions of the clause, counsel for the applicants made submissions in relation to these alternative constructions:

(a) that the gift in clause 4 was so broad as to amount to a gift of the residue to the trustees absolutely;

(b) that the residue was left on trust for the grandchildren;

(c) that the residue was left on trust for the children and grandchildren.

[10] Counsel for the first respondent (the litigation guardian of the infant grandchildren) submitted that there was a valid trust in favour of the grandchildren.

[11] Counsel for the second respondent (one of the deceased’s daughters) supported the applicants’ primary position that there was an intestacy as to the residuary estate.

[12] On the hearing of the application it was common ground:

(a)that clause 4 contained a specific gift of the dinner service to the deceased’s granddaughter; and

(b)that clause 4 contained no more than a direction or wish in relation to the distribution of his other personal effects.

Construction principles

[13] The will must be construed so as to give effect to the deceased’s intention. As Lord Romer said in Perrin v Morgan:[1]

“I take it to be a cardinal rule of construction that a will should be so construed as to give effect to the intention of the testator, such intention being gathered from the language of the will read in the light of the circumstances in which the will was made. In order to understand the language employed the court is entitled, to use the familiar expression, to sit in the testator’s armchair.”[2]

[14] As I explained in The Trust Co Ltd v Zdilar & ors:[3]

“[21] Under the armchair rule, the court receives extrinsic evidence of the factual matrix in which a testator made his will to explain what he has written and show the meaning of words he has used. The rule applies both in circumstances where the will is clear as to the testator’s intentions and in circumstances where there is an ambiguity in the will.[4] This sort of extrinsic evidence is ‘totally distinct from evidence sought to be applied to prove the testator’s intention as an independent fact’[5] in cases of ambiguity. The distinction is explained by Haines in Construction of Wills in Australia

‘5.6 Evidence of 'surrounding circumstances' is admissible. That being so, how does a court discern between such evidence and evidence of intention? The phrase ‘surrounding circumstances’ is imprecise and can be ‘illustrated but hardly defined’.[6] Evidence of surrounding circumstances is admissible for the purposes of interpretation of a will.[7] The object or purpose of the inquiry is to identify, by reference to those circumstances, some subject matter ‘whether corporeal or merely conceptual, to which the words were intended to apply’.[8] The court does not arrive at the intention of a testator as a fact but sees what is the intention expressed in the words, used as they were ‘with regard to the particular circumstances and facts with regard to which they were used’.”

[15] In The Public Trustee of Queensland v Smith[9] Atkinson J summarised the orthodox approach to the construction of a will in this way:

“[20] The task of a court of construction is to discover the testator’s intention by examination of the words used in the will.[10] Judicial construction involves having ‘regard to any rules of construction which have been established by the Courts, and subject to that, [such courts]… are bound to construe the will as trained legal minds would do'.[11]

[21] The general principle governing construction of a will is the 'usual meaning rule.' This rule finds its source in the classic work by Sir James Wigram, Admission of Extrinsic Evidence in Aid of the Interpretation of Wills, first published in 1831.[12] It is expressed by Hardingham, Neave and Ford as:

‘The basic principle, to which several qualifications must later be made, is that the court interprets the words of the will, in the context in which they appear, according to their usual or primary meaning.[13] If the words of the will are clear, and are capable of application by reference to extrinsic circumstances, the court will not admit evidence to demonstrate that the testator used the words in something other than their ordinary sense.[14]

It is only where the usual meaning is insufficient to resolve the construction of a provision of a will that the court may consider extrinsic evidence to resolve its meaning.”

[16] Her Honour went on to consider the circumstances in which extrinsic evidence is admissible to determine a testator’s intention. This question is now affected by s 33C of the Succession Act 1981 (Qld), which provides:

33C Use of evidence to interpret a will

(1) In a proceeding to interpret a will, evidence, including evidence of the testator’s intention, is admissible to help in the interpretation of the language used in the will if the language makes the will or part of it -

(a) meaningless; or

(b) ambiguous on the face of the will; or

(c) ambiguous in the light of surrounding circumstances.

(2) However, evidence of the testator’s intention is not admissible to establish any of the circumstances mentioned  in subsection (1)(c).

(3) This section does not prevent the admission of evidence that would otherwise be admissible in a proceeding to interpret a will.”

[17] After discussing this provision and the rules of construction developed under the general law that are still available since its introduction, Her Honour said:

“[26] It follows from the foregoing discussion that the court of construction should start with the words of the will. If their usual meaning is clear, the will will be given that construction. If not, the court may have regard to such extrinsic evidence as allowed by the rules of construction traditionally applied by the courts with the addition of the aids to construction found in s 33C of the Act.”

Earlier will

[18] The only earlier will before the Court was executed on 26 June 2000. It was prepared by solicitors. By that will the deceased appointed the second respondent his executor and trustee. Apart from a bequest of $20,000 to Deborah Judas, he left his estate to his trustee for the establishment of a testamentary trust for his five children and “any grandchild of mine”. 

The evidence of Bronwyn Williams (one of the applicants)

[19] The deceased’s granddaughter Bronwyn Williams (née Jones) was a 20 year old university student. The deceased, whom she called “Grandpa Jack”, told her that he was disappointed by the way a property transaction he had undertaken with his daughter Janice Reinecker (the second respondent) had turned out, and so he wanted to make a new will. He asked her to type his will on her laptop computer. He came to her parents’ house where she was living, and they sat across the kitchen table while he dictated the contents of the will, which she typed. He showed her three or four previous wills. He read from one of them but she was not sure which one. At no stage did he seek her input in relation to the contents of the will. She has deposed:

“27.  As to clause 4 of the will, again I believe that Grandpa Jack was reading from a document which he had in front of him. I do not recall him seeming to be thinking about the wording as he went along, he seemed to be reading from another page.

28.  I did not discuss the purpose of the trust in clause 4 with Grandpa Jack, or who were to be the beneficiaries of the clause.

29. I have only three things I recall about clause 4. To the best of my recollection Grandpa Jack did say something about loaning money to family members such as his children or grandchildren, but I can now no longer recall the words he used or the effect of the words.

30. The second thing I recall about clause 4 is a comment that Grandpa Jack made that he would be happy for money to be used for grandchildren’s education but not to buy a fast car.

31.  The third thing I recall is that Grandpa Jack said to me that what the other executor Liz and I did with the money was at our discretion.

32.  I can recall no other discussion about clause 4.

33.  After Grandpa Jack had finished dictating the new will, he said that he would like to include a specific bequest to thank me for assisting him to prepare the new will.  Grandpa Jack asked if there was anything of his that I would like.  I told Grandpa Jack that it was not necessary, as I was happy to help him. However, Grandpa Jack insisted and dictated the final paragraph of the body of the will.”

They both read over the whole will on the computer screen to check for spelling and grammatical errors. The deceased told her he planned to have his neighbours witness it that afternoon. She has no recollection of ever speaking with the deceased about the will again.

[20] None of the parties objected to the admission of Ms Williams’ evidence.

The evidence of Elizabeth O’Brien (the other applicant)

[21] Within a few days of making the will, the deceased showed it to his daughter Elizabeth O’Brien, who has deposed:

“9.  I read the will. I immediately told my father that I objected to the way in which the Will had been made with respect to clause 4.  Whilst my father had previously asked me to be an Executor jointly with Bronwyn Williams, and I had agreed, he had not told me that he intended me and Bronwyn to administer a trust fund after his death. I told my father that I objected to doing so because I was virtually estranged from my four siblings and I was concerned that administering a trust fund on their behalf would make them even more unhappy with me.

10.  My father explained to me why he wished Bronwyn and me to be trustees of the trust and his residuary estate.

11.  He told me that he was concerned that his children, other than me, would waste the money if he left it to them directly.”

In her affidavit Mrs O’Brien recounted what the deceased said about each of her siblings’ capacity to manage money, and continued:

“13.  In contrast to my siblings, my father told me that he respected the way my husband and I have managed our finances and he therefore felt he could trust me, in conjunction with Bronwyn, to properly administer a trust fund on behalf of his family.”

She urged him to reconsider. They talked about the paragraph about spending money on grandchildren’s education.

“19.He reiterated to me however that it was a matter entirely for Bronwyn’s and my discretion as to whether we contributed to all the grandchildren’s education at all, or only to the education of some of them.

20.  My father also said to me that he wanted to be sure that the trust fund could meet the other amounts which might need to be paid on behalf of David’s children. In particular he referred to one of David’s children who he believed was terminally ill and the need to be in a position to assist as necessary in relation to that child.”

[22] In mid or late 2009 the deceased showed Mrs O’Brien the earlier will he had made on 26 June 2000. He pointed to clauses 6 and 7 of the earlier will, by which he had provided for a testamentary trust for the benefit of his five children and his grandchildren, and said words to the effect:

“This is the sort of thing I want you to do with my Will.”

[23] Counsel for the first respondent objected to the admission of Mrs O’Brien’s affidavit on the basis that it did not attempt to give any meaning or clarity to the words used in the will. She submitted that it was an attempt to show that the words used were meaningless or ambiguous, and that it was therefore inadmissible pursuant to s 33C(2). Counsel for the second respondent objected to it on the basis it did not provide evidence of the deceased’s intention based on any language used in the will, but was rather an attempt to rewrite the will.

[24] I consider that Mrs O’Brien’s evidence is inadmissible: it goes to the creation of an ambiguity rather than to the resolution of an ambiguity in the wording of the will.

Requirements for a valid trust

[25] Section 33R of the Succession Act 1981 (Qld) provides:

33R When a person may delegate power to dispose of property by a will

A power or a trust, created by will, to dispose of property is not void on the ground that it is a delegation of the testator's power to make a will, if the same power or trust would be valid if made by the testator, by instrument, in the testator's lifetime.”

[26] The requirements for a valid trust are described in Jacobs’ Law of Trusts in Australia:[15]

“There are four essential elements present in every form of trust: the trustee, the trust property, the beneficiary or charitable purpose, and the personal obligation annexed to property.”

[27] With some exceptions (principally charitable trusts), any trust must have a beneficiary (or object), and a purported trust without a beneficiary is void. The degree of certainty with which the beneficiaries of a private trust must be identified varies according to whether it is a fixed trust or a discretionary trust.[16] 

[28] The beneficiaries of a fixed trust must be identified with sufficient precision to satisfy “list certainty” – i.e. it must be possible for the trustees, or the Court in their stead, to identify all of them.

[29] In the case of a discretionary trust, the beneficiaries must be defined with sufficient certainty to satisfy “criterion certainty” – i.e. it must be possible to say with certainty whether any given individual is or is not a member of the class of persons intended as beneficiaries, even though it may not be possible to identify every member of the class. Nevertheless, their definition must not be:

“… so hopelessly wide as to not form ‘anything like a class’ so that the trust is administratively unworkable or … one that cannot be executed.”[17]

Submissions

[30] Counsel for the first respondent focussed on the first sentence in the second paragraph of clause 4:

“Monies may be applied to Education of all my Grandchildren and allocated as my Executors shall see fit.”

She submitted:

“4.  The clause must, of course, be read as a whole.  It mentions only two categories of persons: the executors and ‘all of my Grandchildren’. [sic] The clause cannot sensibly be read as if the gift to the executors was other than for the purpose of the application of the trust fund for the benefit of ‘all my Grandchildren’. That class is defined and it is limited.

5.  The scope of the power of the trustees to apply money is equally defined:

(a)‘applied to Education’;

(b)‘invested as my Executors shall she fit’;

(c)‘may sell or dispose of properties as they see fit’;

(d)‘loans may be made to those whose ability to repay such loans is proved’.

6.  There is no doubt, as a matter of construction, that the investment of the trust fund, including by way of loans, permits the maintenance of the trust fund pending its application, from time to time, for the education of the grandchildren.  The power to sell permits the executors to convert property into money.

7.  It is wrong to suggest that a power to make loans is somehow an attempt to create a class of beneficiaries, as a loan from a trust is not a distribution from the trust, but an investment.  The recipient of any such loan would not be a beneficiary of the trust, but a debtor.

8.  There is, therefore, no ambiguity in the clause concerning the objects of the trust or the uses to which the trust properly can be put.”

[31] Counsel for the applicant submitted that it is not possible to construe the trust, unlimited as it seems to be by the phrase “administered by them as they shall see fit”, by the sentences in the second paragraph. She quoted this passage from Ford & Lee’s Principles of the Law of Trusts:[18]

“Where a gift is made to benefit a person in a stated manner it is a question of construction whether the settlor or testator had the primary object of making a gift to the person or having the specified purpose carried out. Where the person is to have the benefit he or she is entitled to the subject of the gift and is free to decide whether or not to have the purpose carried out: Dubois v Hodgson.[19] If a testator leaves property to T on trust ‘for the education of my grandchildren’ is that a trust for beneficiaries or a trust for the purpose of educating them? Such a trust is treated as one for beneficiaries: Re O’Mullane (decd).[20] In that case there was an issue whether the disposition made to the grandchildren an unconditional gift of the entire beneficial ownership of the property or a gift confined to so much, if any, of the property as might be required to provide education to the grandchildren. The court held that it was an unconditional gift of the entire beneficial ownership. The court relied on a rule of construction that where property is bequeathed to a beneficiary and a special purpose of benefiting him or her in a particular way is assigned for the gift, the disposition should prima facie be construed as absolute and the purpose merely as the motive for the gift, so that the beneficiary takes the whole of the property and not merely much as is needed to effect the purpose. See also Dubois v Hodgson[21] in which a fund to be used in the repair and renovation and improvement of a certain property was held to be given to the devisees of that property.”

Her submissions continued:

“61.The difference in the current case however is that this is not a trust ‘for the education of my grandchildren’ rather it is a trust to the trustees to be administered by them as they shall see fit.  The description on the second page of the will that monies ‘may be applied to’ the education of grandchildren, monies may be invested, properties may be sold or disposed of, and loans may be made to certain unidentified persons, all suggests, it is submitted, that they are matters which the testator wished to identify as powers which his trustees could exercise for the administration of the trust, not the purpose of the trust itself, and certainly not the means by which the objects of the trust could be identified. Nothing in the wording suggests that the trust is limited to those purposes. Arguably the only two ‘purposes’ actually identified are for the education of grandchildren and the making of loans. The loans however do not seem to be limited to the grandchildren but rather limited only to those persons who have the ability to repay them.

62.Is this sufficient to identify a class or classes as the objects of the trust?

63.The executor submits that the answer must be ‘no’.

64.Firstly, the description that the trustees could administer the trust ‘as they shall see fit’ seems to be inconsistent with limiting the class to the very narrow group of beneficiaries being the deceased’s grandchildren.

65.Secondly, the use of the permissive ‘may be applied to (the) education of all my Grandchildren’ suggests rather that the deceased was identifying powers he would have been content for the trustees to exercise, rather than providing a criterion by which selection of beneficiaries could be made.

66.Thirdly, the sentence applying monies to the education of grandchildren is found amongst a series of other similar sentences all directed to the types of powers the trustees might exercise, suggesting it was just that, a power but not a means of selection of beneficiaries.

67.Fourthly, the direction that the executors are entitled to administer the fund by the making of loans to persons, who can prove an ability to repay a loan, does nothing to advance the criterion certainty of the beneficiaries.  How would ‘ability to repay’ a loan be judged? Would it be by the size of the loan, the length of time over which it was to be repaid, the interest rate set, the current earnings of the borrower, the future earnings of the borrower, the purpose of the loan, or some combination of these or other factors? Would these persons be family members, friends or arms length third parties? In no way is this sentence directed to the loans to the grandchildren only.

68.Fifthly, the evidence of Bronwyn Williams goes to the deceased’s intentions being that loans could be made to ‘family members’[22] including children and grandchildren. This would suggest that the trust was not intended to benefit merely grandchildren, but all family members.

69.Sixthly, the evidence of Elizabeth O’Brien is entirely inconsistent with the objects of the trust being limited solely to the grandchildren.

70.The executor submits that no class or classes are created by the words on page 2 of the will. No objects are identified, or identifiable, and so the trust must fail.”

[32] Counsel for the second respondent made submissions to similar effect, except that he objected to Mrs O’Brien’s evidence.

Discussion

[33] The context in which the will was made is to be found in the earlier will of 26 June 2000 and the evidence of Bronwyn Williams that the deceased was disappointed by the outcome of a property transaction he had undertaken with the second respondent.

[34] Clause 4 must be read in the context of the will as a whole, and in the light of the circumstances in which it was made. By his earlier will, the deceased had appointed the second respondent his executor and he had left his residuary estate on trust for all his children and his grandchildren.

[35] By this will the deceased appointed the applicants his executors; he made a bequest of $1,000 to the second respondent and  bequests of $30,000 to each of his other four children (as well as a bequest of $25,000 to Ms Judas), and then dealt with the residue of his estate in clause 4.

[36] Clause 4 must be read as a whole. The first paragraph purports to create a trust, but does not name the beneficiaries or describe them in any way. The second paragraph gives the trustees certain powers. The third paragraph contains a specific gift of the deceased’s dinner service to his granddaughter (in other words, the dinner service was not to fall into residue but was dealt with separately) and expresses a non-binding wish that his other personal effects be distributed to “family members”.

[37] There are a number of indicators that the deceased did not intend to leave his residuary estate on trust for his grandchildren absolutely.

(a) A trust for his grandchildren absolutely would be inconsistent with the first paragraph of clause 4 – that the trust be administered by the executors as they see fit.

(b) The second paragraph lists a number of things which the trustees “may” do. Applying moneys to the education of the deceased’s grandchildren is just one of them. There is no limitation on the persons or institutions with whom moneys may be invested, or to whom properties may be sold or otherwise disposed of. The only limitation on those to whom loans may be made is that their ability to repay the loans must be proved.

(c) The second paragraph further provides that the gifts in clause 3 (none of which is to a grandchild) are to be distributed at such times as the executors see fit.

(d) The deceased’s personal effects (other than the dinner service) were part of his residuary estate. In the third paragraph he expressed the wish that these be distributed to “family members” – a class prima facie wider than “grandchildren”.

[38] There is no ambiguity as to the deceased’s intention, which was that the executors (the trustees of the trust) decide upon the beneficiaries of the trust.

[39] The applicant executors were right not to press the argument that clause 4 amounted to the conferral of a general power of appointment under which they, as donees of the power, could appoint the residuary estate to anyone, including themselves. If that were the correct interpretation of clause 4, it could be considered a gift of the residuary estate to them absolutely. However, as counsel for the applicants acknowledged, the wording of clause 4 suggests that the deceased intended them to exercise their discretion in favour of others who are unspecified, but not themselves. Were the gift intended to be tantamount to a gift to the applicants absolutely, it would have been unnecessary to give them the powers in the second paragraph.

[40] Nor do I think it is arguable that it was the deceased’s intention to benefit his children and grandchildren as the objects of the trust. Such an argument could be made only if there were an ambiguity in the will and the evidence of Mrs O’Brien were admissible to assist in the resolution of that ambiguity. However, there is no ambiguity: there is nothing in the will which might be thought to identify the children and grandchildren as the beneficiaries of the trust. In my view Mrs O’Brien’s evidence is not admissible.

[41] The trust the deceased purported to create necessarily failed for want of beneficiaries. It follows that there is a partial intestacy. The residuary estate is to be distributed in accordance with the intestacy rules.

Costs

[42] The costs of the applicants and the first respondent of and incidental to this application, including reserved costs if any, should be assessed on the indemnity basis and paid out of the estate.

[43] The estate is quite a large one in contemporary terms. Counsel for the applicants acted properly in raising all possible interpretations of the will, but did not press the arguments that by clause 4 the deceased gave the applicants a general power of appointment under which they could distribute the residuary estate to anyone including themselves, or the argument that the deceased intended to benefit his children and his grandchildren as the objects of the trust.

[44] The second respondent was separately represented, and seeks her costs out of the estate on the indemnity basis. I accept that her relationships with the deceased and her siblings were at least strained.  She always stood to gain a substantial benefit from the application of the intestacy rules to the residuary estate. Even though her stance on the substantive question was consistent with the applicant’s primary position that there is an intestacy as to the residuary estate, in all the circumstances, I consider that the second respondent should have her costs out of the estate on the indemnity basis.

Orders

[45] The Court orders as follows:

(i) That there be a declaration that upon the proper construction of clause 4 of the will of Jack Jones deceased dated 31 October 2006 there is an intestacy as to the deceased’s residuary estate created by the words:

OTHER than the gifts and bequests set out in Clause 3 of this my Will I GIVE, DEVISE AND BEQUEATH the balance, rest, remainder and residue of my estate to a trust or other entity to be set up by my Executors and Administrators and administered by them as they shall see fit.

Monies may be applied to Education of all my Grandchildren and allocated as my Executors shall see fit. Monies may be invested as my Executors shall see fit. On my death, my Executors may sell or dispose of properties as they see fit. All gifts and bequests as set out in Clause 3 to be distributed at times as seen fit by the Executors. Loans may be made to those whose ability to repay such loans is proved.”

(ii) That the costs of the applicants, the first respondent and the second respondent of and incidental to this application, including reserved costs if any, be assessed on the indemnity basis and paid out of the deceased’s estate.

Footnotes

[1] [1943] AC 399, 420.

[2] [1943] AC 399, 420; cited in Re Blake (dec’d) (2009) 25 VR 27, 32 per Forrest J.

[3] (2011) ASTLR 379, [21].

[4] David M Haines, Construction of Wills in Australia 2007 [5.3].

[5] Will of Loughlin; Acheson v O’Meara [1906] VLR 597, 601 per Hood J; see generally Haines above

n 4, [5.3] –[5.12].

[6] Reardon Smith Line Ltd v Hansen-Tungen [1976] 1 WLR 989, 995 per Lord Wilberforce; Rabin Gerson Berger Association Ltd [1986] 1 WLR 526, 533 per Fox LJ.

[7] Blakely and Anderson v De Lambert [1959] NZLR 356, 368 per FB Adams J.

[8] Inglis v Buttery (1877-8) 3 App Cas 552, 577.

[9] [2009] 1 Qd R 26, [20] –[21].

[10] Perrin v Morgan [1943] AC 399, 406 per Viscount Simon; IJ Hardingham, MA Neave, HAJ Ford, Wills and Intestacy (2nd ed), 1989 [1101]; David M Haines, Construction of Wills in Australia 2007 [5.2]; Ken Mackie and Mark Burton, Outline of Succession (2nd ed), 2000 [7.4] – [7.6].

[11] Ralph v Carrick (1879) 11 Ch D 873, 878 per Cotton LJ, cited with approval by Isaacs, J in Fell v Fell (1922) 31 CLR 268, 273.

[12] IJ Hardingham, MA Neave, HAJ Ford, Wills and Intestacy, (2nd ed), 1989 [1102].

[13] Wigram’s propositions I and II are as follows:

I. A testator is always presumed to use the words in which he expresses himself, according to their strict and primary acceptation, unless, from the context of the will, it appears that he has used them in a different sense, in which case the sense in which he thus appears to have used them, will be the sense in which they are to be construed.

II. Where there is nothing in the context of a will from which it is apparent that a testator has used the words in which he has expressed himself in any other than their strict and primary sense, and where his words so interpreted are sensible with reference to extrinsic circumstances, it is an inflexible rule of construction, that the words of the will shall be interpreted in their strict and primary sense, and in no other, although they may be capable of some popular or secondary interpretation, and although the most conclusive evidence of intention to use them in such popular or secondary sense be  tendered: Extrinsic Evidence in Aid of Interpretation of Wills (5th ed), 1914, 16-8.

[14] Sir Arthur Underhill and James Andrew Strahan, Principles of the Interpretation of Wills and Settlements, (3rd ed), 1927, 4 - 6; Doe d. Oxenden v Chichester [1816] 3 ER 1091; Hardwick v Hardwick (1873) LR 16 Eq 168; Robinson v Goold (1886) 8 ALT 38; Re Bennet (1901) 21 NZLR 113; Higgins v Dawson [1902] AC 1; Re Goodes [1902] SALR 86, 91 per Way CJ; Re McKay (1958) 17 GLR 571; Re Grazebrook [1928] VLR 75; Re Petersen [1920] St R Qd 42; Pearce v Wright (1926) 26 SR (NSW) 515; Gilmour v MacPhillamy [1930] AC 712, 716 per Lord Tomlin; Re Robertson [1942] VLR 137; Perpetual Trustee Co Ltd v Archbold (1946) 46 SR (NSW) 327; Hulks v Wills (1949) 50 SR (NSW) 74; Re Rowland [1963] Ch 1; Re Edwards [1964] VR 551, 553 per Herring CJ; Re Hackett [1966] VR 232; Re Bell [1969] VR 597; Re Jones [1971] NZLR 796; Re Rowlands [1973] VR 225; Re Atkinson [1978] 1 WLR 586, 590; Re Cuthbertson [1979] Tas R 93; Re Allen [1988] 1 Qd R 1.

[15] J D Heydon and M J Leeming, Jacobs’ Law of Trusts in Australia (7th ed), 2006, para [104].

[16] ibid paras [524] – [527]; McPhail v Doulton [1971] AC 424, 457.

[17] McPhail v Doulton [1971] AC 424, 457 per Lord Wilberforce.

[18] At [5.090]

[19] [1999] NSWSC 1065.

[20] [1955] VLR 217.

[21] [1999] NSWSC 1065.

[22] Affidavit of Bronwyn Williams at paragraph 29.

Close

Editorial Notes

  • Published Case Name:

    O'Brien & Anor v Smith & Anor

  • Shortened Case Name:

    O'Brien v Smith

  • Reported Citation:

    [2013] 1 Qd R 223

  • MNC:

    [2012] QSC 166

  • Court:

    QSC

  • Judge(s):

    M Wilson J

  • Date:

    19 Jun 2012

Litigation History

Event Citation or File Date Notes
Primary Judgment [2013] 1 Qd R 223 19 Jun 2012 -

Appeal Status

No Status