De Martin v Jacobs [2008] NSWSC 1378 | Case summary

3842/08 - DE MARTIN v JACOBS JUDGMENT 1 HIS HONOUR: The present proceedings arise out of the will of the late Valda Dawn Savell made on 23 September 2005. Ms Savell died on 24 September 2007. The will is an odd will. It was drawn by a solicitor, but it omits provisions that one would have expected any solicitor-drawn will to include, such as a provision for the payment of debts, funeral and testamentary expenses. Yet, as will become apparent, the will tends to use technical terms in a very confusing way. As far as it is relevant, it provides in cl 2 that Jule Ainslie Rigby be appointed executrix. Clauses 3 and 4 are as follows: "3. GIFT OF ESTATE My executor shall hold my estate ON TRUST to divide it as follows: (a) The sum of five hundred dollars ($500) to my friend CHERYL ... for her to use for the upkeep of all the animals I have at the date of my death until they can be humanely euthanased. (b) The rest and residue of my estate to Jule ... but if she dies before me or before attaining a vested interest the following provision shall apply. 4. SUBSTITUTE EXECUTORS I APPOINT as my executors and trustees TONY ... and DEBORAH ... (called 'my executors' which includes my personal representatives and trustees for the time being)." 2 There was a substitutional gift in cl 5 to Tony and Deborah (the plaintiffs) with a provision that if that trust fails then the estate passes to the Cancer Council free of all duties. Clause 8 deals with the powers of executor and sub-clause (b) is as follows: "(b) To apply for the benefit of any beneficiary as she thinks fit the whole or any part of any capital to which that beneficiary is entitled or may in future be entitled and, on her becoming absolutely entitled, to bring into account any payments supplied under this clause." 3 Sub-clause (d) provides: "To apply for the maintenance education benefit of any minor beneficiary as my executor thinks fit the whole or any part of the capital of that part of my estate to which that beneficiary is entitled or may in future be entitled." 4 It can be seen that there is a lot of surplusage there and a lot of misuse of language. For instance, cl 3 talks about the executor is to hold the estate "to divide it". There is no division. There is merely a gift of $500 for a person to look after the testatrix's animals and the whole estate passes to Jule. Again there are surplus words at the end of cl 4 which include "my personal representatives" etc in an appointment of executors. 5 Then in clause 5 we get for the first time the words "free of all duties". What is the sense of giving the whole of the estate to somebody free of all duties? That somebody will have to pay the duties or they will never get the estate. Then in cl 8(d) we get a reference to a benefit or education of a minor beneficiary yet there could not possibly be one. 6 So that when one looks at the will as a whole it is a very badly drawn instrument and appears to have been put together by using standard clauses without, with respect, much thought as to how they could be applicable to this particular testatrix. 7 Accordingly, when considering cl 3(b), one looks at the scheme of the will on the whole, and sees the frequent surplusage. 8 What happened was that Jule did take some action to organise the estate's affairs between the date of death of the testatrix on 24 September 2007 and her own death on 10 October 2007. 9 The estate consisted, according to the inventory of property attached to the probate, of real property at Moss Vale worth about $700,000, moneys in banks and credit unions of about $60,000, a box trailer, three or four motor vehicles, a horse and a cat. 10 The Registrar in Probate granted probate in common form to the defendant Joan Jacobs who is the executrix of Jule. Jule never took out probate. It would seem that the Registrar considered that s 13 of the Imperial Acts Application Act 1969 meant that Jule's executrix, Joan Jacobs, had the best right to the grant. That is not completely clear. I believe it is the correct approach, however, if it is wrong, the only consequence is that there should have been a grant of letters of administration cta to Joan Jacobs so that the matter is of no moment. 11 The plaintiffs applied for a grant, but, as I have said, the Registrar ruled against them. They also say that cl 3(b) contains two conditions for Jule to take her benefaction: (a) that she not die before the testatrix; and (b) that her interest be a vested interest. Obviously condition (a) was fulfilled, but (b) cannot mean the same as (a), is the argument of Mr T J Morahan, who appeared for the plaintiffs, therefore, it must mean something else. 12 There are a whole series of problems with wills using the word "vested". The word "vested" can mean "vested in interest" and it can mean "vested in possession". Here Mr Morahan says, it must mean vested in possession and that means the time when Jule took the estate beneficially, that is, in the case of real estate, when there was a transmission application to her as beneficiary. If she died before that time, then the substitute gifts in cl 5 took over. 13 There are three possible meanings of the words "or before attaining a vested interest" in cl 3(b), namely: (a) that they are tautologous and mean the same as "if she dies before me"; (b) that they mean what Mr Morahan says they mean; or (c) that they mean before the estate is fully administered. 14 To flesh out (c), when a person dies with a number of assets, there is no property in any of those assets that immediately passes to the named beneficiaries. It is only after the death, funeral and testamentary expenses have been paid that those assets which are not required under the provisions of the will or the legislation to be used for payment of debts at that stage become in equity the property of the beneficiaries. 15 Possibility (c) cannot be correct because it is envisaged by cl 4 that if the contingency in cl 5(b) takes place there will be a substitution of the people who can take the grant. However, the time of the estate being fully administered must occur after the grant has been already taken out. 16 Treating the words as meaning "vested in possession" also causes great difficulties. One can understand there being a question of whether something is "vested in interest" or "vested in possession" where there is a life estate. I was referred by Mr Morahan to the decision of Williams J in Queensland in Re McElwaine (6 June 1997, unreported) where his Honour considered what was a vested interest, but that was a case which involved a life estate. I was also referred to Re Butterworth (13 December 1996, unreported), a decision of the Supreme Court of Western Australia. That was a case where the testator purported to make a condition that his son Kacey took the property on attaining 18 years with a proviso that "should he predecease me or die before attaining a vested interest" then there would be certain substitutionary gifts. There again one can see some reason for talking about a vested interest if one assumes that the attaining of the stated age is a condition and not merely an indication of desire. A similar problem came before White J in Austin v Wells [2008] NSWSC 1266. 17 It was good of Mr Morahan to do that research, but it does not seem to me that it assists me in the present case because here we have an out and out gift of the whole of the rest and residue to Jule with no life estate or condition of attaining a certain age. Whilst one can give some meaning to the words "vested in possession" with a devise of land, it is difficult to do so when the gift is of residue consisting of a conglomeration of pieces of real and personal property including cars, a horse and a cat. 18 Accordingly, it seems to me that one has got to read the words "or before attaining a vested interest" as meaning the same as if she dies before me. In other words, mere surplusage. 19 Mr Morahan pointed out to me that the court does have an obligation to read every word of the will and not to omit any and that indeed is the general rule. The word ought not to be disregarded if it can be given some meaning which is not contrary to the testatrix's intention; see eg, Halsbury's Laws of England, 4th ed, at [433] and the cases there cited. 20 However, in the instant case, there is so much surplusage in the will that I have less qualms about either reading out of the will those words or reading them as the same as meaning if she dies before me than I otherwise would have. As Halsbury points out, it is a general, but not inflexible canon of construction that the will should be so construed that every word has effect; see eg, Martin v Holgate (1866) LR 1 HL 175 at 185: it is not an absolute rule of law. 21 Mr M Gorrick, who appears for the defendant, also has referred me to a number of cases and I have taken those on board, but it does not seem to me that they really take the matter any further. It is really a matter of looking at this particular will and trying to see what the testatrix intended to do by the words she used rather than applying any presumptive rules of construction. 22 The summons seeks a declaration for the true construction of the will and, because it was a summons brought by the plaintiffs, it is in terms which I cannot make, but I should make a reverse declaration that on the true construction of the will of the late Valda Dawn Savell and in the events which have happened, the defendant holds the estate on trust for the estate of the late Jule Ainslie Rigby. I decline to order revocation of the probate as I consider the Registrar was correct in granting probate. 23 The proper order for costs is that, as the problem was caused by the testatrix, her estate should bear the costs, so I order that the costs of both parties come out of the estate, the plaintiffs' costs on the ordinary basis, the defendant's costs on the trustee basis.

De Martin v Jacobs

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