BETWEEN : CHRISTINA MAREE PARNELL as Executor of the Estate of THOMAS WARNOCK WALKER

Succession - Construction of Will - Specific bequest of certain property - Specified property was partnership property - Whether effective gift - Whether gift of "remaining cash and investments" was disposition of residuary Estate - Turns on own facts

Boorer v Boorer [1908] WN 189

Borlaug v The University of Western Australia [2001] WASCA 425

Fell v Fell [1922] HCA 55; (1922) 31 CLR 268

Hamersley v Newton [2005] WASC 221; (2005) 30 WAR 568

Hendry v Perpetual Executors & Trustees Association of Australia Ltd [1961] HCA 44; (1961) 106 CLR 256

In re Crocombe (decd) [1949] SASR 302

In re Edwards; Jones v Jones [1906] 1 Ch 570

In the Goods of Bramley [1902] P 106

Marks v Pope [2001] NSWSC 105

Martin v Rumble, unreported; SCt of Vic (Ashley J); 12 May 1994

O'Sullivan v Robbins [1937] Ch 118

Porter v Hindsley [1929] 1 Ch 446

Price v Newton [1905] 2 Ch 55

Prichard v Prichard (1870) LR 11 Eq 232

Re Cadogan (1883) 25 Ch D 154

Re Emerson [1929] 1 Ch 128

Re Lilly's Will Trusts [1948] 2 All ER 906

Re McLennan (decd) [1963] VicRp 42; [1963] VR 270

Re Pringle (1881) 17 Ch D 819

Re Stonham [1963] 1 All ER 377

Re Taylor; Taylor v Tweedie [1923] 1 Ch 99

Re Wellsted's Will Trusts; Wellsted v Hanson [1949] Ch 296

Re Wragg (decd); Hollingsworth v Wragg [1959] 1 WLR 922

Sciacca v Ghidella [2001] QSC 134

Vickers v Young [1982] FCA 72; (1982) 65 FLR 260

WA Trustee, Executor & Agency Co Ltd v Birkbeck (1921) 23 WALR 27

Watts v Smithers [1939] 3 All ER 689

1 MASTER NEWNES: This is an application by the plaintiff, as executor of the Will of the late Thomas Warnock Walker (the "testator"), for directions as to the proper construction of the Will.

2 The testator, who was a farmer, died on 5 January 2005 leaving an Estate (the "Estate") valued at almost $7,000,000 and a very brief home-made will (the "Will"), on a standard stationer's form, dated 31 October 2004. Probate of the Will was granted on 5 May 2005.

3 The first defendant is a beneficiary under the Will. The second and third defendants are the only surviving relatives of the testator, the second defendant being the surviving daughter of one of the testator's two sisters (both of whom predeceased him) and the third defendant being the grandchild of the other sister. The second and third defendants will be entitled to a share in the distribution of the Estate in the event of intestacy or a partial intestacy.

4 The fourth defendant is a beneficiary under the Will and had lived in a de facto relationship with the testator since about the end of 1961, the fourth defendant's husband having died early the previous year. The fourth defendant and the testator owned and operated adjoining farming properties and from the end of 1961 the two properties were farmed using common machinery and other facilities. The fourth defendant describes the two properties as being "run as one". I understand, however, that the farms remained separately owned by the fourth defendant and the testator respectively.

5 The testator for many years carried on his farming business under the name "T W Walker & Co" in partnership (the "partnership") with Mardieyerrup Farming Co Pty Ltd (the "company"). The company was incorporated in June 1977, at which time the testator and the fourth defendant were appointed as the directors and the testator as the company secretary. The testator held one fully paid $1 "A" class share and 1000 fully paid $1 "C" class shares in the company and the fourth defendant held one fully paid $1 "B" class share.

6 The articles of association of the company provided that the testator's "A" class share was, during the testator's lifetime, the governing director's share, giving the testator effectively complete control over the affairs of the company. On his death it converted to a "C" class share. The fourth defendant's "B" class share was a redeemable preference share which could be redeemed by the company at par upon notice. It conferred no right to participate in profits or assets of the company and no preferential right to dividends. A "C" class share entitled the holder to participate equally between them and all other classes of shares, except "A" class shares, in profits and assets of the company but no preferential right to dividends.

7 At the date of his death, the testator's Estate, so far as relevant for present purposes, comprised the following assets:

(a) moneys standing to the credit of an ANZ farm management account ($100,364.38);

(b) moneys standing to the credit of a Home Building Society account ($1,071.51);

(c) units in BT Funds Financial Group, Perpetual Investments and Portfolio Partners unit trusts (total value $153,024.55); and

(d) his shareholding in the company (valued at $241,527).

8 The testator's assets also included his interest in the partnership (which was valued for probate at $2,108,365). At the date of the testator's death, so far as relevant for present purposes, the partnership had the following assets:

(b) cash at bank in an ANZ Grain Plus account ($484,773);

(j) various public company shares (valued at $22,358).

9 The relevant provisions of the testator's Will were as follows:

"UPON MY DEATH and payment of ... all my debts, funeral and testamentary expenses I GIVE the rest of my estate as follows:

$200,000 dollars to Cristina [sic] Marie Parnell

All land and plant to Brenton Craig Hinkley

All livestock and wool to Brenton Craig Hinkley

$100,000 dollars to Amy Della Nicholas

All remaining cash and investments to Brenton Craig Hinkley"

10 The plaintiff, as executor of the Estate, has sought the following directions:

1. Does the testator's gift to the first defendant of all plant, livestock and wool include the testator's interest in property of the partnership meeting that description?

2. Which of the following assets of the testator are included within the expression "all remaining cash and investments" within the meaning of the Will:

(a) money standing to the credit of his ANZ Farm Management account;

(b) money standing to the credit of his Home Building Society account;

(c) his units in BT Funds Financial Group, Perpetual Investments and Portfolio Partners unit trusts; and

3. Does the testator's gift to the first defendant of "all remaining cash and investments" include the testator's interest in property of the partnership meeting that description?

4. If the answer to question 3 is "yes", which of the assets of the partnership referred to above are included within the expression "all remaining cash and investments" within the meaning of the Will:

(b) money standing to the credit of the ANZ Grain Plus account;

(c) money standing to the credit of the ANZ Term Deposit account;

5. To the extent the Will creates a partial intestacy and the second, third and/or fourth defendants are thereby beneficiaries of the Estate to that extent, from which asset or assets of the Estate are the debts of the Estate to be paid or, if already paid, debited?

6. To the extent the Will creates a partial intestacy and the second, third and/or fourth defendants are thereby beneficiaries of the Estate to that extent, from which asset or assets of the Estate are the pecuniary benefits to the plaintiff (in her capacity as a beneficiary) and to the fourth defendant to be debited?

11 I did not understand the general principles applicable to the interpretation of a will to be in issue on the application.

12 The 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. The language employed in the Will should be read in the sense which the testator appears to have attached to the expressions used, albeit it is not to be construed on the basis of what it is suspected the testator intended, other than as expressed in the terms of the Will: Fell v Fell [1922] HCA 55; (1922) 31 CLR 268 at 273; WA Trustee, Executor & Agency Co Ltd v Birkbeck (1921) 23 WALR 27 at 29, 31 - 32; Perrin v Morgan [1943] AC 399 at 406, 414 - 415, 416, 420; Borlaug v The University of Western Australia [2001] WASCA 425 at [15]. The overriding consideration is the language used by the testator and the Court can neither ignore the plain meaning of words nor unnecessarily introduce words to give effect to an intention that is not expressed: In re Crocombe (decd) [1949] SASR 302 at 315.

13 The proper approach is first to construe the Will having regard to its actual language, content and circumstances, and only to have regard to canons of construction and other decisions on the meaning of a word or phrase in the case of ambiguity: WA Trustee, Executor & Agency Co Ltd v Birkbeck (supra); Perrin v Morgan (supra); Borlaug v The University of Western Australia (supra). In Perrin v Morgan, Viscount Simon LC said:

"... the duty of a judge who is called on to interpret a will containing ordinary English words, is not to regard previous decisions as constituting a sort of legal dictionary to be consulted and remorselessly applied whatever the testator may have intended, but to construe the particular document so as to arrive at the testator's real meaning according to its actual language and circumstances."

14 As each will is to be construed having regard to its own particular language, content and circumstances, the meaning given to a word or expression in other cases will often be of little assistance. That will particularly be so where the will to be construed has been drawn by a layperson who is unlikely to have been aware of the meaning given in other cases: see Re Taylor; Taylor v Tweedie [1923] 1 Ch 99 at 105, 109 - 110; Perrin v Morgan (supra) at 407; In re Crocombe (decd) (supra) at 315; Borlaug v The University of Western Australia (supra) at [45] - [48]. Accordingly, where a testator has made a will without professional assistance, the expressions used in the will should not be construed literally and technically: Re Taylor; Taylor v Tweedie (supra). And where it is appropriate to consider the meaning of a word given in an earlier case, regard must be had to any change in circumstances or in the use of language: Perrin v Morgan (supra) at 417 - 418.

15 There is a presumption against intestacy, namely that the will should, if possible, on a fair and reasonable construction, be construed so as to lead to a testacy rather than an intestacy or partial intestacy: Fell v Fell (supra) at 275 - 276, 284; Hamersley v Newton [2005] WASC 221; (2005) 30 WAR 568 at 583. But the presumption against intestacy "is not a strong presumption": Marks v Pope [2001] NSWSC 105 at [17]. A court should not lean too heavily against a construction that produces an intestacy and, cannot, in order to avoid an intestacy, misconstrue the language of the will: In re Edwards; Jones v Jones [1906] 1 Ch 570 at 574; Re Wragg (decd); Hollingsworth v Wragg [1959] 1 WLR 922 at 929.

16 Against that background, I turn to the directions sought by the plaintiff.

Did the testator's gift to the first defendant of "all ... plant" and "all livestock and wool" include the testator's interest in the plant, livestock and wool of the partnership?

17 The testator in fact owned no plant, livestock or wool in his own name. All assets of such description were owned by the partnership.

18 All of the parties accepted that the interest of the testator in the partnership assets of those descriptions formed part of the bequest to the first defendant under the Will. In my view, they were correct in doing so.

19 The present case is, in my view, in all material respects indistinguishable from Hendry v Perpetual Executors & Trustees Association of Australia Ltd [1961] HCA 44; (1961) 106 CLR 256. There the testator owned no real estate or livestock of his own but was a member of a partnership which owned both. He left a will disposing of "all my livestock" to A, the proceeds of conversion of "all my real estate" to B and the proceeds of conversion "of the residue of my personal estate" to C. It was held that the gifts to A and B were apt to dispose of the testator's interest in the livestock and land owned by the partnership at the testator's death.

20 The High Court rejected, as irrelevant, any enquiry into the rights of the testator as a partner or into the rights of his executor by virtue of the partnership upon the testator's death. The question was what the testator meant by the words in his will. When looked at in light of the circumstances as they existed immediately before his death, the conclusion was inevitable that the testator was disposing of whatever interest he held in the partnership livestock to A and that he was disposing of the net proceeds of whatever interest he held in the partnership land to B.

21 In the present case, the only assets to which the expressions used by the testator could apply are those owned by the partnership. Accordingly, although the Will refers to the items of property themselves, as opposed to an interest in such property, it is, in my view, apt to dispose of the interests in question.

Which, if any, of the following assets of the testator are included within the expression "all remaining cash and investments" within the meaning of cl 3 of the Will?

22 The words "cash" and "investments" are not words of fixed or certain meaning. It is therefore convenient, before dealing with the property concerned, to turn to the meanings that are normally to be given to "cash" and "investments".

23 The word "cash" is defined in the Macquarie Dictionary to mean "money esp. money on hand, as opposed to a money equivalent (as a cheque)". In the Shorter Oxford Dictionary it is defined to mean "ready money, actual coins, notes, etc (opp. credit); (in banking and commerce) coins, or coins and banknotes as opp. to cheques and orders; (colloq) money, wealth". It is, I think, the case that in modern parlance "cash" and "money" are commonly used synonymically.

24 In Boorer v Boorer [1908] WN 189, it was held that the term "cash at my bankers" included money on current drawing account and money on deposit, provided the latter was repayable on demand without notice. In Bent v Thomas (1942) 86 SJ 134, it was held that funds in a post office savings deposit account which could only be withdrawn on notice did not fall within the meaning of "cash".

25 On the other hand, in Re Wellsted's Will Trusts; Wellsted v Hanson [1949] Ch 296, Lord Greene MR said (at 314):

" 'Cash' of course is a loose expression. Nowadays it does not mean mere cash in one's pocket, but it includes a chose in action like money on current or deposit account at the bank."

26 In Re Stonham [1963] 1 All ER 377, Wilberforce J held that funds in a current account and funds in a deposit account (the latter being withdrawable on a number of days notice) each fell within the description "cash in Lloyds Bank". His Honour observed that the question was what was meant by the testatrix in that particular will by the expression, and noted that earlier decisions as to the normal meaning of those terms provided guidance to, rather than solutions of, the problem of ascertaining the testatrix's intention from the words she had used in the circumstances in which she had used them.

"So the cases seem to establish this: (1) 'Money' can (albeit by a process of extension justified by the context) include money on deposit; so can, rather more easily, 'money in the bank'. (2) 'Ready money' or 'ready money in the bank' does not normally mean money for which a substantial period of notice is required. As regards 'cash' the question would seem to be whether the testator is using it in the sense of ready money or merely as synonymous with money without any implication of readiness, and in the normal case the conclusion would probably be the former."

28 In Vickers v Young [1982] FCA 72; (1982) 65 FLR 260, Morling J doubted (at 278) whether, in common parlance in Australia, money on fixed deposit would be regarded as cash.

29 Similarly, "investment" does not have a necessarily fixed or certain meaning. In "Jarman on Wills" 8th ed, at 1288, the learned author says bluntly " 'Investment' is a vague term and no general rule can be laid down as to its meaning."

30 In the Macquarie Dictionary, "investment" is defined to mean "the investing of money or capital in order to secure profitable returns, esp. interest or income". In the Shorter Oxford Dictionary "investment" is defined to mean "the investing of money". "Invest", in turn, is defined to mean "expend (money, effort) in something from which a return or profit is expected, now esp. in the purchase of property, shares etc, for the sake of interest, dividends or profits accruing from them".

31 In Price v Newton [1905] 2 Ch 55, at 58 - 59, Farwell J considered that, in ordinary parlance, a person would not regard moneys put on deposit account at 10 days call - where the interest rate was one per cent below bank rate - as being a "pecuniary investment". In O'Sullivan v Robbins [1937] Ch 118, Bennett J considered that the view of Farwell J depended entirely upon the context in which the words "pecuniary investment" had occurred in that case. Bennett J concluded that money on deposit could, in accordance with popular parlance, be described as an investment.

32 In Re Lilly's Will Trusts [1948] 2 All ER 906, Harman J (at 907), by way of obiter, accepted that generally "anything was an investment which was a mode of laying out money with a view to obtaining a return". See also Sciacca v Ghidella [2001] QSC 134 at [20] - [21].

33 It was submitted on behalf of the plaintiff that it was relevant in the current context that the words "cash" and "investments" appear in the context of the expression "all remaining cash and investments" (emphasis added). Counsel argued that that suggested something in the nature of a residuary bequest. It occurred after the reference to payment of all funeral and other expenses and after specific bequests, and followed the words "I GIVE the rest of my estate as follows ..." (emphasis added).

34 Counsel for the plaintiff submitted first that, in the absence of any other gift of the residue, the provision should be construed as a gift of general residue passing all personal property not specifically disposed of. Counsel referred to Porter v Hindsley [1929] 1 Ch 446 at 448; Watts v Smithers [1939] 3 All ER 689 at 694. Those submissions were adopted by counsel for the first defendant. Although that contention is perhaps not precisely in terms of any of the questions posed in the originating process, I understood all counsel were content to deal with that issue. Counsel for the plaintiff submitted, in the alternative, that the words "all remaining cash and investments" were sufficient to encompass most, if not all, of the balance of the property of the Estate.

35 I do not think there is any doubt that the word "money" can be used by a testator in a sense wide enough to embrace his whole residuary estate. Thus, for example, in Prichard v Prichard (1870) LR 11 Eq 232, the testator directed that the income arising from his principal money should be paid to his wife, while she did not remarry, for her support and the education of his children and upon her remarriage or death was to be divided between the children. It was held that the whole personal estate, including leaseholds, was intended to pass. That decision was approved by the House of Lords in Perrin v Morgan (supra) at 419.

36 In Re Cadogan (1883) 25 Ch D 154, the testatrix made a gift of "the money of which I am possessed". In fact the testatrix's "money", in the strict sense, formed only a very small part of her estate. The testatrix had made the will only two days before her death. It was held that the gift passed all the personal estate. That decision was followed in In the Goods of Bramley [1902] P 106, the latter decision also being approved in Perrin v Morgan (supra) at 419.

37 In Re Pringle (1881) 17 Ch D 819, the testator made a number of pecuniary and specific bequests and a gift of "all the rest of my money, however invested". The latter gift was held to pass the general personal estate. See also Re Emerson [1929] 1 Ch 128.

38 Watts v Smithers (supra) concerned a home-made will by which the testatrix, after directing payment of her debts and funeral and testamentary expenses, gave to B "when my securities have been converted into cash, two-thirds of the proceeds", to H the sum of 500 pounds and to L "the remainder of the money". It was held that "the remainder of the money" meant the remainder of the residual estate, after payment of the debts, funeral and testamentary expenses, and after providing for the specific legacies. Crossman J said (at 694) that "where you have a gift of the remainder of the testator's money, following upon a direction to pay debts, etc., the words 'the money' ought to be, and in fact I think must be, construed as meaning the personal estate of the testator or testatrix [sic]".

39 In Perrin v Morgan (supra), by her home-made will the testatrix directed that "all moneys of which I die possessed shall be shared by my nephews and nieces now living". The personalty of the testatrix consisted of investments, cash at bank, dividends received or accrued, rents due, income tax payments due, and household goods. The House of Lords held that, in the context, the bequest of "moneys" included all of that personalty.

40 Re McLennan (decd) [1963] VicRp 42; [1963] VR 270 also concerned a home-made will. There the testator's estate consisted of Commonwealth Treasury bonds, inscribed stock, mortgage debenture stock, money on loan, money in savings banks, interest and accrued salary. By his will, the testator made a bequest of 100 pounds to his godson and then provided that "the remainder of my money be divided equally between [and he named four nieces and nephews]". The will further provided that "all my personal effects" be divided among certain named persons. Sholl J considered that were it not for the reference to "all my personal effects", there was ample authority for treating the expression "the remainder of my money" as a general residuary gift to the nieces and nephews. His Honour referred, in particular, to Perrin v Morgan (supra) and Porter v Hindsley (supra). In the event, Sholl J concluded that, while it did not have effect as a general residuary gift, the expression "the remainder of my money" included all of the assets of the estate.

41 In Martin v Rumble, unreported; SCt of Vic (Ashley J); 12 May 1994, the will had been professionally prepared. By his will the testator, among other things, devised certain real property to two named beneficiaries. The testator also provided, by cl 3(b)(i) of the will, that "any cash which I stand possessed at the date of my death [is] to be divided equally between" certain named persons. There was no provision dealing with the residuary estate. Before his death the testator entered into a contract to sell the real property in question but died before its completion. The contract settled after his death. It was common ground that the devise of the real property had failed by ademption and the question arose whether the proceeds of the sale of the property fell to be disposed of under cl 3(b)(i) or on a partial intestacy. Ashley J held that the money constituted part of the personal estate under cl 3(b)(i). His Honour considered that, in the circumstances, "cash" should be equated with "money" in the broad sense of the latter. In reaching that conclusion, Ashley J took into account, among other things, the presumption against intestacy, the disclosed intention of the testator to dispose of the whole of his estate by his will, the absence of any residuary disposition, the fact that cl 3(b)(i) was the only clause making a non-specific disposition of property, and the use of the word "any" preceding "cash".

42 In the present case, the property in question is the money in the ANZ Farm Management and the Home Building Society accounts, the units in the unit trusts, the testator's shareholding in the company, and the testator's interest in the partnership (save to the extent that it is the subject of the preceding specific bequests).

43 The Will was made only a little over two months before the testator's death. It is evident from the terms of the Will that the testator intended to dispose of his entire Estate by his Will. That, it seems to me, is clear from the words "[the] rest of my estate" following the direction to pay the testator's debts, funeral and testamentary expenses.

44 It is relevant that in this case there is no residuary disposition. The Will is a home-made will and the provision in question is the only provision of the Will making a general disposition.

45 It is also a relevant factor that there is a presumption against intestacy, whether partial or total, although, of course, that does not permit the words of the Will to be stretched beyond any reasonable construction.

46 The relevant part of the Will follows certain monetary gifts and gifts of all of the testator's land, plant, livestock and wool. It then disposes of "[a]ll remaining cash and investments to Brenton Craig Hinkley." The reference to "remaining" cash and investments must, I think, be read as those remaining after the preceding bequests have been satisfied. It is evident that the preceding gifts, while they include some of "cash", do not involve any of "investments" as that word would usually be understood.

47 Having regard to the context, it is evident, in my view, that in this case the testator has not used the expression "cash and investments" in any precise or technical sense but in the very general and colloquial sense of his wealth or assets. In the case of this home-made Will it is, in my view, clear from the circumstances and the words used that it was the testator's intention to pass the balance of his Estate to the first defendant. To so construe the Will is to give effect to the intention of the testator as it appears from the language of the Will, taking into account that the Will is framed in the language, not of a lawyer, but of the testator himself, and is general and somewhat colloquial in its terms.

48 In my view, therefore, the gift of "all remaining cash and investments" is a gift of the residuary Estate of the testator.

49 I should add that even if it did not have effect as a gift of the residuary Estate, in my view the disposition of "all remaining cash and investments" would, in any event, be sufficient to encompass all of the assets referred to. I consider that the amounts in the various accounts in the testator's name are clearly either cash or investments, and for present purposes it is unnecessary to consider into which category each falls. A shareholding in a private trading company would not usually fall within the meaning of "cash or investments" but, having regard to the structure of the company and the general and somewhat colloquial manner in which I think it is evident the testator used that expression in his Will, in my view it is sufficient in the present case to encompass the testator's shares in the company. The balance of the testator's interest in the partnership (that is to say, after the specific bequests to which I have referred above) would, for the same reasons, fall within the meaning of "cash or investments" as the testator used that expression in his Will.

50 It follows that no question of intestacy arises and therefore the remaining two matters upon which directions have been sought do not arise.

51 I would therefore answer the questions raised by the plaintiff as follows:

3. It includes the testator's interest in the partnership property remaining after the specific bequests of his interest in the partnership plant, livestock and wool.

4. The whole of the testator's interest in the partnership remaining after the specific bequests of his interest in the partnership plant, livestock and wool.

52 I will hear the parties on the appropriate form of orders and on costs.