Crnjanin v Crnjanin & Ors [2011] QSC 295

The applicant acknowledges that the point of construction is finely balanced but favours the view that "only one bequest is made to June Crnjanin in the Will and it is a 'rolled up' bequest which clearly includes the residuary estate." The applicant submits that to construe the clause effectively as two distinct gifts would require the addition of words so as to make the clause read: "I give to JUNE CRNJANIN all MONIES held by me in BANK or INVESTMENT ACCOUNTS and I give to June Crnjanin ALL OTHER ASSETS both REAL, or PERSONAL held by me at the time of my death." He acknowledges, however, that balancing this consideration is the fact that, if the clause is to be read as entirely residuary, then one effectively has to ignore the words of the first limb. They would become otiose by virtue of being embraced in the general category of "all other assets" that constitutes the second limb.

[17] On balance, the applicant submits that, in a self-drawn will, it is:

(a) more likely that the testator would not understand that the words of the second limb included the property described in the first limb; and

(b) unlikely that the testator intended to make a second provision in favour of June Crnjanin by inserting words after the "and" that separates the two limbs.

[18] The fifth respondent submits that cl 8 is intended to be a residuary clause in its entirety, the purpose of which is to dispose of the deceased's assets which were not covered by cll 3 to 7. He relies upon the fact that clause eight is a single sentence and contends that it should simply be given its ordinary meaning because there is no other intention shown on the face of the will. He submits, placing some reliance on the use of the word "and" to link the two limbs of the clause, that the ordinary meaning is "that the gift is a single gift of monies in the bank and the residue of the estate." The submissions of the fifth respondent cite authorities to the effect that the mere enumeration of particular things in a residuary gift does not make those things specific gifts separate from the residue. He also points to the fact that the executor has not produced any evidence to establish that the deceased intended the clause to be anything other than a residuary bequest.

[19] That last point carries little weight. It is not incumbent upon the executor or anyone else to produce evidence in favour of a particular interpretation. If such evidence exists, in certain circumstances it may be placed before the Court and used as an aid to construction. But the starting point is that the testator's intentions are not to be gleaned from evidence but from the will itself. If the will's meaning is ambiguous, then the lack of any such evidence does not mean that one construction is to be preferred on the basis that some presumption has not been rebutted or some onus has not been discharged.

[20] Counsel for John Crnjanin in his capacities as first and fourth respondents to this application advanced seven arguments in favour of the construction of cl 8 as part specific and part residuary. I need not recite them all. He submits that the "monies" in cl 8 have been identified as distinct from the testator's other property, and that the use of the words "and" and "other" suggests that the monies so identified were intended by the testator to be severed from the residuary estate. He also points to the fact that there is no basis, either in the ejusdem generis principle or in the words of the clause itself, for finding that the words in the second limb in any way control the words preceding them in the first limb. It is also submitted that the testator cannot have intended the first limb to be swept up with the residuary estate for the simple reason that so to hold would render the words of the first limb redundant. Because the testator specified his "monies" and then went on to refer to "all other assets", it is submitted that the reference to "monies" ought to be given a meaning of its own, which would not be the case if it were construed simply to form part of the residue.

[21] The will is a one page document, containing the nine clauses set out above. Some effort has gone into its production. It is not handwritten but typed with the aid of a word processing program, and much use has been made of the ability to vary the font, size and emphasis of different parts of its text. It is not the work of professionals, but care has been taken to include elements that some people might take to be markers of a "formal" will.

[22] The page is headed "THIS IS THE LAST WILL AND TESTAMENT" in large, stylised writing, followed underneath by:

Below its nine clauses (already set out above) appears the same stylised writing as appears at the top of the page, albeit in smaller font. It reads:

I have hereunto set my hand this..........day of..............,20...."

Handwritten additions complete the date, and below that appears Mr Moiseenko's signature. The document then continues:

"Signed by the above named testator as the testator's last Will and Testament, in the presence of us both being present at the same time, who in the testator's presence, and in the presence of each other, have hereunto subscribed our names as witnesses".

Below that, and completing the document, are the signatures of two witnesses. One of the witnesses indicates that s/he is self-employed, the other has written "Home Duties" in the space for "Occupation". One of the witnesses gives a street address, the other has simply written "Brisbane" in the space for an address.

[23] Looking at the document as a whole, it has obviously been produced by a lay person or persons, but with guidance as to its proper form. In short, a significant amount of care and effort seems to have gone into it. While clearly a lay production, its format, structure, spelling, grammar and punctuation are sound.

[24] The will is simply structured. It begins with a revocation clause. It then appoints a single executor, with no provision made for what should happen in the event of that person being unable or unwilling so to serve. Then follow cll 3 to 8, which contain the will's dispositive provisions. In cll 3 to 7, the testator disposes of one or more items of real property to a nominated beneficiary.

[25] Clause 8 then gives "all MONIES held by me in BANK or INVESTMENT ACCOUNTS and ALL OTHER ASSETS both REAL, or PERSONAL held by me at the time of my death." Consistently with the other dispositive clauses, this provision deals with a single nominated beneficiary. Unlike the other clauses, however, it gives no specific real property. Rather, it disposes of everything else in the estate.

[26] The will's structure indicates that the testator identified his intended beneficiaries in cll 3 to 8. The will devotes a clause to each beneficiary. The testator listed in each clause which of the assets in his estate he was allocating to the relevant beneficiary. As it happens, most of the assets in the estate were items of real property. The final specific asset was the over $100,000 in cash held in the testator's bank and investment accounts. These "monies" are identified as one of the "assets" of the testator by the words of cl 8. They are identified in contradistinction to "all other assets ... held by me at the time of my death." The testator indicated that he wished to give the monies to June Crnjanin. Then, with the addition of "and", he added that he also wished to give to June Crnjanin the residue of his estate.

[27] It is significant that one of the limbs is clearly residuary. The position might well be different if this will was lacking in any obviously residuary disposition. Where there is a gift of monies simpliciter and no residuary disposition anywhere in the will - depending always, of course, on the nature of the words used in the particular will in question - it may be that the clause would be less likely to be construed as a specific gift of those monies and more likely to be construed as a gift of those monies after payment of the estate's debts. But here there is a clear residuary clause constituted by the second limb, and that is a factor that inclines me to the view that the testator's intention in including such a disposition was to differentiate the residue from the gift of monies that preceded it in the first limb of cl 8. It is significant, too, as the first and fourth respondents contend, that the words in the first limb are "all monies" and not "all remaining monies" or some other phrase that would indicate that the testator had in mind that the monies were to be applied for certain other purposes before being distributed.

[28] I do not think that the fact that cl 8 is expressed in a single sentence carries much weight in favour of it constituting a single residuary bequest. Clauses 6 and 7 make multiple gifts, albeit of specific real property, in a single sentence that uses the word "and" to join the dispositions. It is true, as the fifth respondent submits, that the word "and" in cl 8 joins the gifts of monies and residue into a single sentence. But multiple dispositions, and types of disposition, can be given in a single sentence. Also, it might just as easily be said that the word "and" acts as an acknowledgment that there are, in fact, two dispositions. That rather reinforces the view that they ought to be treated as two dispositions rather than as a single disposition in which the words of the second half plainly embrace and therefore render redundant the words in the first half.

[29] Contrary to the submission of the applicant, a construction of the clause as part specific and part residuary does not require the insertion of additional words between the two limbs. That submission looks to words that would be most apt to express the relevant intention. The task of construction, however, requires one to take the words that are used and to ascertain the testator's intention from them. No doubt the insertion of the additional words "I give to June Crnjanin" (for a second time) would make the distinction between the two gifts clearer, but the testator may have thought that he was being clear enough by specifying his intention to give to June Crnjanin the various assets stated in cl 8. The language adopted was imperfect by the standards of lawyers parsing the sentence in court, but it was apt and adequate to identify two distinct gifts.

[30] That language is, moreover, only functional in its entirety if it is read as conveying two gifts. I consider that a greater strain is placed on the clause by construing it as if the testator somehow did not know that "monies" were "assets" of his, or that he appreciated that fact and nevertheless chose to precede his residuary gift of those monies with redundant words specifying the monies as a gift to June Crnjanin. To interpret the clause as part specific and part residuary does not necessarily require the importation of additional words. However, to interpret the clause as entirely residuary does require that the words of the first limb be deemed superfluous by virtue of being an unnecessary enumeration of what was dealt with in the second limb of the clause. In those circumstances, it seems to me more probable - for that is the test[5] - that the testator intended the words of the first limb to amount to a specific bequest. If he had intended the clause not to include a specific bequest of the identified monies, then he could, and probably would, simply have written cl 8 in terms of its second limb.

[31] In this case, a construction of the clause that does not render its first limb largely redundant ought to be preferred. By construing the clause as part specific and part residuary the whole clause can be given meaning.

[32] In the words of Isaacs J (as he then was) in Fell v Fell:

"as Chief Justice Wilmot quaintly said in Dodson v Grew, 'Words are only pictures of ideas upon paper.' So long as we find the ideas delineated on the paper, it matters nothing how crude the craftsmanship may be."[6]

Clause 8 is somewhat lacking in craftsmanship whatever construction is put upon it. However, effectively to ignore the words of the first limb would be to ignore the idea that they seem to convey. I am required to give effect to the intentions of the testator as expressed in the words he chose to use. In my judgment, the testator chose to use the words of the first limb because they conveyed an intention that was distinct from the words used in the second limb.

[33] I am mindful of the words of Dixon J (as he then was) in Backhouse v Lloyd[7]: "The enumeration of particular things in a residuary gift is not sufficient to make the gift of things enumerated specific." I respectfully accept that statement. But Dixon J was not saying that clauses combining enumerated items with a residuary gift are always to be construed as residuary dispositions. Rather, the construction always depends upon the particular words used and the intention expressed by the will as a whole. In Re O'Brien; Raftis v O'Brien,[8] Sir Leo Cussen, who was then the Acting Chief Justice, construed the following clause as wholly residuary:

"I bequeath all my life policies furniture effects and all other personal property whatsoever to my said wife..."

"I think that, although the cases reach a very fine point, I must hold it to be residuary, the enumeration of the life policies, furniture and effects being merely an enumeration and not amounting to a specific bequest. If the bequest had been of 'all my life policies furniture and effects together with all other personal property, the result might have been different".[9]

[34] Again, I accept, with respect, the application of relevant principles in the circumstances of that case. However, the words of this will are different. The first limb of cl 8 deals with a specific type of asset. There follows after the word "and" a gift of the residue of the estate. This is not a case involving the enumeration of particular things that are rolled into a concluding reference to residue.[10]

[35] If the testator had enumerated in a general fashion some items of his remaining property in the first limb of cl 8, and then added the second limb, the result might have been different. But that is not what he did. Rather, he specifically identified one class of property ("monies"), and went on to identify with further specificity that he was not referring to any or all monies but to monies in identified classes of accounts, namely "bank or investment accounts". He did not specify the particular accounts by reference to their individual account numbers, branches and the like. But I agree with the submission of the first and fourth respondents to the effect that the testator's words in the first limb have nevertheless "referred to a specific fund belonging to him as the subject of the gift".[11] This is not a case like O'Brien in which the clause in question enumerates more or less vaguely a string of items of property and then rolls them up with "all other property". I think it would be reasonable to believe, in some cases, that the more things that are enumerated in the lead up to clearly residuary words like "all other property", then the more likely it may be that the testator intended the clause to be a residuary one that rolled up everything together. Here, however, the testator chose to specify only one thing, money, which he limited to particular types of accounts. I consider that this is indicative of an intention to differentiate that gift from the gift that was contained in the words creating the residuary disposition.

[36] In any event, balancing cases like O'Brien are decisions like that of Sir William Grant MR in Clarke v Butler,[12] to which counsel for the first and fourth respondents referred me. The relevant disposition in that case began with the testator's leasehold house in London and all the household goods and furniture there and at Sawbridge. The same clause went on as follows:

"and as to all my plate, linen, china-ware, pictures, live and dead stock, and all the rest and residue of my goods, chattels, and personal estate, whatsoever and wheresoever, not hereinbefore by me disposed of, after the payment of my just debts, legacies [and so on]...".

The Master of the Rolls in that case, in the words of the report, "thought that the bequest comprised two distinct sentences". The leasehold house in London and the goods and furniture there and at Sawbridge were "clearly" intended to be specific gifts, and "although that intention appeared somewhat doubtful as to the particulars enumerated in the second division of the clause in question, yet, from the nature of those particulars, it appeared probable that he considered them as specific also."[13] Accordingly, the plate, linen, china-ware, pictures, live and dead stock constituted a specific bequest distinct from the residuary disposition.

[37] Authorities like Clarke v Butler and O'Brien show that cases of this kind turn on fine points, and involve a perennial problem that can only be resolved in the context of the words used in the will that is to be construed. The task is to ascertain the intention of the testator in each case, as expressed by the language used in the will. The point to be taken from a consideration of the cases is that there is no hard and fast rule for construing clauses like the one I have to construe.

[38] On balance, I construe the first limb of cl 8 as a specific gift of the monies to which it refers. To adopt the words of Dixon CJ, the deceased has designated those monies as something that "form[s] an identifiable part of his property and is, so to speak, distinguished by the intention of the testator as ascertained from his will to separate it in his disposition from the rest of his property for the purpose of bequeathing it as the distinct subject of a testamentary disposition."[14]

Directions for the final administration of the estate

[39] The applicant executor seeks directions for the final administration of the estate. The first relates to estate accounts and taxation liabilities.

[40] A significant accounting exercise has had to be undertaken to establish the assets and liabilities of the estate. The testator had not lodged tax returns for many years, and Mr Halloran's affidavit sets out how he, as the estate's accountant, has had to reconstruct 17 years of the testator's affairs, and obtain a waiver in part from the Australian Taxation Office.

[41] The inability to ascertain with certainty that the ATO has been paid its debts gives rise to a right of the executor to apply for a direction that he can distribute "on the footing that" all the debts have been ascertained.[15] Obviously this will not bind the ATO but it facilitates the administration of the estate. I consider that it is appropriate to make the directions sought.

[42] Other directions are sought in relation to how debts and expenses of the administration of the estate of the deceased which exceed the value of the residuary estate are to be paid rateably by the specific devisees referred to in paragraphs 3 to 7 of the will and by the fourth respondent who benefits from the specific bequest in the first limb of cl 8. It might be said that there is no need to provide directions since the provisions of the Succession Act are clear. The specifically devised or bequeathed property is to be applied in the discharge of the debts rateably according to value.

[43] Directions are also sought in relation to whether any specific devisee should have the option to determine whether his or her respective property be sold or retained and charged. The parties are agreed on the appropriate form of order.

[44] A further issue relates to whether the executor is obliged to expend funds from the estate to make the properties referred to in cll 3 to 7 of the will habitable, saleable (if necessary) and insurable. Such a course would delay and complicate the administration of the estate. It is difficult to see how it can be in the interests of the estate as a whole to expend money repairing properties that are the subject of a specific devise. The preferable course is to complete the administration of the estate and to have the properties transferred to the relevant devisee. The executor is entitled to, and should receive, payment of the amount calculated for each beneficiary's share of the monies to be paid into the estate before the relevant property or properties are transferred. I indicate that the executor can insist upon payment of the monies so charged before transmitting the property to the relevant devisee.

[45] As to costs, the originating application was properly brought and the costs of the parties were necessarily incurred for the benefit of the estate in the resolution of the issue of construction and to answer a number of questions that have arisen in the administration of the estate. The application was properly met by the respondents. In the circumstances, there should be an order that the costs of all the parties be assessed on the indemnity basis and paid out of the estate.

1. The Court declares that, on its proper construction, clause 8 of the last will and testament of Alexander Moiseenko ("the deceased") is a specific bequest as to "all MONIES held by me in BANK or INVESTMENT ACCOUNTS" and a residuary bequest as to "ALL OTHER ASSETS both REAL, or PERSONAL held by me at the time of my death."

2. The Court makes the following directions for the administration of the estate of the late Alexander Moiseenko pursuant to s 96 of the Trusts Act 1973:

(a) The applicant is at liberty to distribute the estate of the deceased on the basis that there is no further liability for income tax on the part of the estate notwithstanding that the Deputy Commissioner of Taxation has refused and/or failed to provide a release of such liability and/or to otherwise certify in that regard;

(b) Any debts and expenses of the administration of the estate of the deceased which exceed the value of the residuary estate of the deceased shall be rateably paid by the specific devisees and the specific legatee referred to in paragraphs 3 to 8 of the Will;

(c) In the event that debts and expenses of the administration of the estate are to be rateably paid by the specific devisees and the specific legatee referred to in paragraphs 3 to 8 of the will the rateable proportion is charged on the specific devise or bequest to which it relates and each specific devisee shall have the option (exercisable by written notice to the executor's solicitors within 21 days of being informed of the amount of the charge) to pay the charge otherwise the relevant property is to be sold;

(d) To the extent that the properties referred to in clauses 3 to 7 of the Will require work to be done to make them habitable, saleable (if necessary) and insurable, the applicant is not obliged to expend money on them from funds presently available to the administration and can transmit such properties to the specific beneficiaries entitled thereto without further seeing to the state of repair of such properties;

(e) To the extent that any property is charged with the payment of money to the estate of the deceased the executor is to insist upon payment of the money so charged before transmission of the property to the beneficiary entitled thereto.

1. All parties' costs of and incidental to this application shall be paid from the estate on an indemnity basis.

[1] Perrin v Morgan [1943] AC 399 at 420.

[3] Fell v Fell [1922] HCA 55; (1922) 31 CLR 268 at 273-4, [1922] HCA 55 per Isaacs J (as he then was).

[4] [1855] EngR 908; (1855) 69 ER 764

[5] Re Carson [1956] St R Qd 466 at 474.

[6] [1922] HCA 55; (1922) 31 CLR 268 at 276, [1922] HCA 55 per Isaacs J (footnotes removed).

[7] [1933] HCA 49; (1933) 49 CLR 559 at 572, [1933] HCA 49 per Dixon J.

[8] [1924] ArgusLawRp 11; [1924] VLR 262.

[10] cf Backhouse v Lloyd [1933] HCA 49; (1933) 49 CLR 559 at 572, [1933] HCA 49 per Dixon J.

[11] Hesse v Donovan [2004] QSC 343 at [41].

[12] [1810] EngR 143; (1810) 35 ER 687.

[14] McBride v Hudson [1962] HCA 5; (1962) 107 CLR 604 at 617, [1962] HCA 5 at [5] per Dixon CJ.

[15] See John Ross Martyn and Nicholas Caddick (eds), Williams, Mortimer and Sunnucks on Executors, Administrators and Probate, 19th ed (London: Sweet and Maxwell, 2008), 694, [50-06].