Succession - Wills, probate and administration - Construction and effect of testamentary dispositions - Generally - Vested or contingent interest - Vesting of remainders - Gift of income to widow and remainder to children - Gift over to children of child who dies - Entitlement in event of child dying during life of widow.

Hamilton v Ritchie [1894] AC 310; Kenna v Conolly (1938) 60 CLR 383; Re Bennett's Will [1857] EngR 942; (1857) 3 K & J 280; Browne v Moody [1936] AC 635, applied.

Judgment ID Number: [2003] TASSC 138

BERNARD JOHN BRADSHAW v HENRY BRADSHAW, NORMAN BRADSHAW, COLINA STEELE, KAYE ASHWIN, LEE COURTNEY, LANA EVANS, LYN GASPERIC, JANICE GASPERIC, GAY BON, RAYMOND ALLAN BROWN and COLIN BERTRAM ADAMS as personal representatives of the Estate of the Late Geraldine Bennett, TASMANIAN PERPETUAL TRUSTEES LIMITED as personal representative of the Estate of the Late Leslie Thomas Bradshaw, ROXIE LORRAINE MULDEN, PETA ELLEN MCDIARMID and CURTIS LESLIE BRADSHAW

1 The application seeks construction of the will of the late Clifford Albert Charles Bradshaw ("the testator"). He died on 4 December 1978 leaving surviving him his widow, Gertrude Agnes Bradshaw ("the widow") and 12 children, four sons and eight daughters. Probate of his will dated 21 August 1978 was granted on 25 July 1980.

2 During the period of the survivorship of the widow two of the testator's children died. They were Geraldine Lesley Bennett, who died on 6 August 1990 without issue, and Leslie Thomas Bradshaw, who died on 2 July 1994 leaving three children who are still living. The widow died on 6 June 2001.

3 The 10 surviving children of the testator are the applicant and the first to ninth respondents. The two children who predeceased the widow have personal representatives who are respectfully the tenth and eleventh respondents. The three children of the late Leslie Thomas Bradshaw are the twelfth to fourteenth respondents. At the hearing of the application, Mr Stanton appeared as counsel for the applicant and Ms Gibson appeared as counsel for the first to ninth respondents. The other respondents were served but did not attend the hearing.

4 By his will the testator appointed the widow and the applicant to be the executors and trustees of the will. He gave and devised his interest in a house at Princess River, and its contents, to his widow, and his interest in a partnership business to the applicant. The clause that has caused difficulty is cl 5:

5. I give and divise[sic] the residue of my estate both real and personal to my Trustees upon trust for sale with full powers of postponement notwithstanding such asset may be of a wasting of[sic]speculative nature and to apply proceeds to pay all debts and funeral and testamentary expenses and subject thereto upon the following trusts

A) To pay the income therefrom to my wife Gertrude Agnes Bradshaw during her lifetime and subject thereto to divide the same capital and income into sixteen shares and to hold one of such shares for each of my daughters and to hold two of such shares for each of my sons (including Bernard John Bradshaw) and

B) Should any child of mine die then his or her children shall take their deceased parents share."

5 The originating application seeks the construction of those provisions for the purpose of determining the interests of persons in the remainder of the residue following the death of the widow, with particular reference to the estates of the two children of the testator who died during the period of survivorship of the widow and the three children of one of them, that is of the late Leslie Thomas Bradshaw. Issues that are raised by these proceedings include whether the interests of the 12 children vested in them at the time of the death of the testator and whether the interest of the late Geraldine Lesley Bennett was divested upon her death without issue prior to the death of the widow. The application seeks the following:

"1 An order determining the construction of clause 5 of the Will of the late Clifford Albert Charles Bradshaw ("the deceased") and in particular:

a) What, if any, share of the estate of the deceased ("the estate") the Trustees of the Estate of the Late Geraldine Bennett are entitled to;

b) What, if any, share of the estate Tasmanian Perpetual Trustees Limited, as Trustee of the Estate of the Late Leslie Thomas Bradshaw is entitled to; and

c) What, if any, share of the estate the children of the Late Leslie Thomas Bradshaw are entitled to."

6 It was common to counsel's submissions that the children of the late Leslie Thomas Bradshaw are entitled to his two sixteenths share in the residue. For the applicant, Mr Stanton understandably took a neutral position concerning what should happen to the one sixteenth share of Geraldine Lesley Bennett, but he drew my attention to some of the authorities that may assist. On the other hand, counsel for the first to ninth respondents, Ms Gibson, submitted that the one sixteenth share of Geraldine Lesley Bennett lapsed and was not disposed of by the will and therefore, is to be distributed as on an intestacy, or alternatively, that it forms part of the residue of the estate to be divided among the other children. She acknowledged that the terms of cl 5A may prevent the alternative from being adopted as the correct interpretation of the clause, but suggested that it would make little difference to the ultimate distribution of the share. However, that suggestion may not be correct, so far as it applies to the applicant, because of the effect of cl 4 of the will that gave to him, for his own use and benefit, the testator's interest in a partnership business and assets. By virtue of the Administration and Probate Act 1933, s47(a), the applicant would be obliged to bring the value of that interest into account when calculating his entitlement under a partial intestacy.

7 When construing a will it is the court's duty to ascertain the testator's intention by construing the language of the will. Perrin v Morgan [1943] AC 399 at 406; Fell v Fell [1922] HCA 55; (1922) 31 CLR 268. A perusal of cl 5 makes it clear that it was the intention of the testator that the entirety of the residue of his estate would be distributed in accordance with its terms. Such an intention coincides with what has been referred to as a golden rule of construction, that the court should aim to interpret and give effect to a will so as to avoid an intestacy. Fell v Fell (supra) at 275 - 276; Byrne v Dunne [1910] HCA 75; (1910) 11 CLR 637.

8 However, I observe that the testator did not specify simply that each son is to receive twice what each daughter is to receive. The distribution of the remainder of the residue is directed to commence with a division of the residue into 16 equal parts and for one or two of such parts, depending on whether the recipient child is a daughter or a son, to be held for each child. I am inevitably led to the conclusion that if a gift to a child fails that child's share, being either one sixteenth or two sixteenths, must lapse and fall to be dealt with by way of partial intestacy, because the terms of cl 5A do not allow for the distribution to the others of a share in the remainder greater than one sixteenth, in the case of a daughter, or two sixteenths, in the case of a son.

9 Conscious that I must interpret the will having regard to all of its provisions, I will nevertheless consider first what would be the effect of cl 5A if parB was not contained in the will. It is clear that if a child of the testator had died without issue prior to the date of death of the testator, the gift to that child would have lapsed and it would have been distributed by way of partial intestacy. Nothing in the will or legislation would save it from lapsing. However, it is equally clear that if a child of the testator had died before the date of death of the testator leaving issue who survived the testator, the gift to that child would not have lapsed. It would have been saved by the Wills Act 1840, s33, and it would have been deemed to have taken effect as if the death of the child had happened immediately after the death of the testator. (The Wills Act 1840 was repealed by the Wills Act 1992, s51 and Sch1, but by s4, the 1992 Act did not apply to the will of a person who died before its commencement.) However, the gift would not necessarily have been distributed among the issue of that child. It would have been disposable under the child's will or as part of his or her intestacy, if the child had no will. Johnson v Johnson [1843] EngR 1042; (1843) 3 Hare 157, 13 LJ Ch 79; Re Mason's Will (1865) 34 Beav 494, 34 LJ Ch 603; Skinner v Ogle (1845) 1 Rob Eccl 363 and Re Peerless, Peerless v Smith [1901] WN 151. If the child's estate was bankrupt, it would have been applied to the estate's creditors. Re Pearson, Smith v Pearson [1920] 1 Ch 247.

10 Section 33 could not operate if "a contrary intention shall appear by the will". See s33. By inserting cl 5B into his will, the testator ensured that s33 could not operate. As a consequence, if the testator's son Leslie Thomas Bradshaw had died before him leaving children surviving the testator, cl 5B would have ensured that Leslie's share would have been divided among his children.

11 There is an unfortunate inadequacy in cl 5B. It does not specify when the testator's child must die so as to entitle his or her children to take their deceased parent's share. When read literally, it can be interpreted as meaning that whenever a child dies leaving children, no matter when the child's death occurs, those children shall take. But that could not be right, for it would lead to a nonsense that every child who has children may not receive the bequest, because every child must die one day. Plainly cl 5B must be interpreted in a way that limits its operation so that, at the very least, as was clearly intended by the testator, a child who has children may nevertheless receive the bequest.

12 It is for a case such as this that the presumption in favour of early vesting applies. In cases where there is a doubt as to the time of vesting, the presumption is in favour of early vesting of the gift and accordingly, if the context allows it, the gift vests at the death of the testator. Hamilton v Ritchie [1894] AC 310. The presumption was expressed by Dixon J in Kenna v Conolly (1938) 60 CLR 383 at 395 - 396 as follows:

"The presumption is in favour of early vesting; the contingency of survival to the period of distribution or enjoyment is not imported into the description of the class and an interest once vesting is not made the subject of a divesting condition except by express words or clear implication."

13 As a general rule, if the postponement of division or payment is merely because there is a prior gift for life, the gift in remainder vests upon the death of the testator. Re Bennett's Will [1857] EngR 942; (1857) 3 K & J 280; Browne v Moody [1936] AC 635 at 646.

14 That the gift of the remainder to the testator's children vested in them upon his death is supported by cl 5A in any event. The direction to divide and hold on trust for the children is not expressed as requiring them to survive the widow. Both the trust for her benefit and the trust for their benefit are expressed to be created so as to take effect at the same time, the only qualification being that the trust for the children is to be subject to the trust for the widow.

15 The conclusion I therefore come to is that cl 5B only operates in the event that there was a child of the testator who died prior to his death. Upon his death, the gift to his children vested in those of them who survived him, and they were not liable to be divested if they died subsequently.

16 The questions asked in the originating application will be answered:

1(a) A one sixteenth share of the residue remaining after satisfaction of the trust for the testator's widow.

(b) A two sixteenths share of the residue remaining after satisfaction of the trust for the testator's widow.