Dunn & Ors v Carter & Anor

Supreme Court of NSW|2004-09-20|Before: Shaw J, O'Bryan J

CITATION : Dunn & Ors v Carter & Anor [2004] NSWSC 862 revised - 23/09/2004 HEARING DATE(S) : 08/06/04, 09/06/04 JUDGMENT DATE : 20 September 2004

JUDGMENT OF : Shaw J DECISION : I order judgment for possession, but not grant (at least at this stage) any writ for possession or leave to apply to a writ of possession and make orders in accordance with those sought by the plaintiff. The plaintiff should have their costs of proceedings before me (other than any costs incurred by the 3rd Defendant).

CATCHWORDS : Construction of will - Whether the will creates merely a personal right of residence or a life estate or other estate in the land LEGISLATION CITED : Real Property Act 1900 (NSW) s42(1) Supreme Court Rules 1970 (NSW) Part 42 r 4 Ex parte Middleton [1983] 1 Qd R 170 Firriolo v Firriolo & Anor [2000] NSWSC 1039 Hurley v Hurley (1947) 75 CLR 289 In re Gibbons v Gibbons [1920] 1 Ch 372 Leese v Davis (1951) 71 WN (NSW) 39 CASES CITED : Leros Pty Ltd v Terara Pty Ltd (1992) 174 CLR 407 May v May (1881) 44 LTNS 412 at 413 Pagano v Ruello [2001] NSWSC 63 Re Hoppe, Deceased; Hoppe v McDavitt [1961] VR 381 Re Potter, Deceased [1970] VR 352 Re The Will of Mayer [1995] 2 Qd R 150 Re Uren (O'Bryan J, unreported, 19 March 1958) PARTIES : Venessa Dunn & Ors Merida Carter & Anor FILE NUMBER(S) : SC 11239 of 2003 COUNSEL : A G Diethelm (Plaintiffs) G George (Defendants 1 & 2) Gibsons Lawyers (Plaintiffs 1, 2 & 3) SOLICITORS : McDonnell Schroder Solicitors (Defendants 1 & 2) C Zucker (Defendant 3)

14 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION COMMON LAW

11239 of 2003 Venessa Dunn & Ors (Plaintiff)

JUDGMENT 1 SHAW J: This is a matter, although being dealt with in the Common Law Division of this Court, which fundamentally concerns the construction of a will. In particular, it concerns the will of the testatrix, Mrs Betty Rosina Godfrey, and whether the will creates merely a personal right of residence or a life estate or other estate in the land. As a retired justice of this court (Hon RP Meagher) once said of Sir Frederick Jordan: despite an almost exclusively equity background, he also proved himself to be a consummate master of the common law. (The reverse process never happens). (Foreword to Equity in New South Wales, 6th ed., 1947) Nonetheless I shall do my best. 2 The relevant provision in the will provides as follows: I GIVE DEVISE AND BEQUEATH the whole of my Estate both real and personal to my Trustee UPON TRUST …as follows: My parents William Bell and Winifred Rosina Bell shall have the right to reside in the property situate at 14 Ryan Crescent, Riverstone in the said State for life or until they elect to no longer reside in the property or are forced to no longer reside in the property because of becoming incapable of looking after themselves. Any costs and expenses incurred in maintaining the house and/or outgoings payable in respect of the house shall be borne by my Estate or by my beneficiaries. My Estate both real and personal shall be divided equally between my daughter MARIE ANTOINETTE HOFER, MAXINE PATRICIA DUNLOP and VENESSA GAY DUNN in equal shares … 3 The first plaintiff and her sisters (the second and third plaintiffs) are the granddaughters of Winifred Rosina Bell. That grandmother continues to live in the premises which are said to be owned by the three plaintiffs at 14 Ryan Crescent, Riverstone in New South Wales. This is the disputed property, which, in addition to the occupancy by the grandmother, is occupied by the first and second defendants. 4 The three plaintiffs were the daughters of the late Betty Godfrey, and all of them were beneficiaries of her estate. They are on the record as registered proprietors of the property. Mrs Godfrey died on 30 June 2002 at the age of 70 years. The evidence is that the plaintiffs have been denied access to the disputed property. 5 Back in 1989, Howard and Betty Godfrey bought the land upon which the property is situated, and built the property. They were the registered proprietors of that property as joint tenants. 6 Meredith and Graham Carter (the defendants) are first cousins of the plaintiffs. Mrs Carter's father is Jack Bell, the brother of the mother of the plaintiffs, the late Betty Godfrey. Thus, Winifred Rosina Bell is the grandmother of the first defendant. 7 The Protective Commissioner of New South Wales has been joined as the third defendant in these proceedings, being the tutor of Winifred Rosina Bell and has appeared in the proceedings before this Court. Its solicitor has played an objective and useful role in the determination of the controversy. Guardianship Tribunal orders were made in August 2002 appointing the Public Guardian as guardian and the Protective Commissioner as estate manager in relation to the affairs of Mrs Winifred Bell. 8 Although there was some peripheral material attesting to family frictions and some court proceedings in relation to them, it seems to me that essential facts are not really in dispute. The task, as I have said, is essentially the construction of the will. 9 The plaintiffs seek an order of judgment for possession of the disputed property namely Lot 1 in Deposited Plan 712237 at Riverstone in the local government area at Blacktown, in the parish of St Matthew, County of Cumberland, title diagram DP 712237. As I have indicated, the certificate of title shows that the plaintiffs are the registered proprietors of that property as tenants in common in equal shares. 10 The plaintiffs have given certain assurances to the Court in disavowing any immediate intention to seek an order granting leave to issue a writ of possession in respect of the property. On the contrary, as I understand it, they have given undertakings to the Court that they will not seek to do so without giving eight weeks notice before such leave is sought to grant a writ of possession. All they seek, at the present time, is a judgment for possession and, somewhat belatedly, a declaration of rights to which I shall return in due course. 11 In relation to concerns about the well-being and ongoing care of the grandmother of the plaintiffs residing in the disputed property, evidence and undertakings have been given to the Court to the effect that if the Court is persuaded to make an order that the plaintiffs should have possession of the property it is the intention of the plaintiffs that their grandmother will continue to live in the property for as long as she wishes and is able to do so. Moreover, the evidence and undertakings given to the Court are to the effect that the plaintiffs will provide assistance to their grandmother in her day to day needs ensuring that she can continue to perform her tasks and that she maintains her current lifestyle for as long as she can continue to live in the property. Evidence has been given that it is the intention of the plaintiffs that they would regularly visit their grandmother and stay overnight if required. The plaintiffs say that they would arrange additional assistance, if that is required, including community services available to the elderly. As a final resort they would provide "overnight care" for their grandmother. 12 I turn then to the question of the construction of the will so as to consider whether the defendants, or any of them, have any right or power to exclude the plaintiffs from the property or to permit or invite the first and second defendants, or other persons, to reside on or occupy the property. It is common ground that whatever rights or powers are possessed by the third defendant with respect to the land, can only, since 30 August 2002, be exercised by the Protective Commissioner. 13 There has been no argument that a trust was created by the events of 1990. Rather, the case of the defendants is that the text of the will results in the legal conclusion that they have a life estate in the property in fee simple. The proposition propounded by the plaintiffs is that the right conferred by the will is only personal, only a right of residence. A number of indicators are said to exist in the text of the will to that effect. First, the right granted is a "right to reside". Secondly, it is argued that only a personal right of residence is intended because the express limitation states that the right persists until the occurrence of specific events: (a) the death of the survivor of Mr and Mrs Bell; or

(b) until they elect to no longer reside in the property; or

(c) until the person or persons are forced to no longer reside in the property because of becoming incapable of looking after themselves. 14 It is argued that, if a life estate were granted, then any such estate would persist until the death of Mr and Mrs Bell, and yet that right is expressed to terminate upon the happening of the events specified in (b) or (c). It is said that that is inconsistent with the grant of a life estate. Although the words "for life" are used in the will, in relation to the right of residence, there is no reference to a "life estate" in the property.

15 In my opinion, the preponderance of persuasive, and some binding authority supports the propositions contended for by the plaintiff. In Hurley v Hurley (1947) 75 CLR 289 the will granted a right "to live there [on the property] while unmarried". Rich J held that: The right conferred was merely a personal right or option which the plaintiff might exercise or not … the personal character of the right is emphasised by the words 'right to live there' (p290, 291) 16 This was a mere personal right to live on the land that did not amount to a trust or a tenancy for life. Rich J held (p 291) that: it is quite clear that he intended that she was to continue the personal enjoyment of [the amenities] assuming that she did not marry. The personal character of the right is emphasised by the word "the right to live there" and by the phrase "the full use of the horse sulky and harness and saddle horse she chooses to ride" 17 The latter considerations are obviously irrelevant to the present case but his Honour did say that it would be "absurd" to suggest that the niece could let the house and pass on to the tenant those amenities. In the result, the fact that the niece had left the dwelling house and lived elsewhere constituted, according to Rich J, an abandonment of her right. During the course of his judgment, Rich J "compared" the English case of May v May (1881) 44 LTNS 412 at 413 in which Fry J construed a codicil which provided that the testator's wife might: "reside rent free in his then present residence during her life." The question is, then, whether, on the construction of this codicil, a life estate in this Moira House is given to the wife, or whether all that is given is a licence to live in the house rent free when she is so minded. 18 In Leese v Davis (1951) 71 WN (NSW) 39 the testator provided words to the effect that in relation to a "top flat" his daughter was to be allowed "to live there." Dwyer J held that the will did not confer upon the daughter any right to re-let but conferred merely a personal right which could be used to oppose any deprivation of her "residential enjoyment." It was held that the words "the right to continue to reside" did not confer a right in a beneficiary to let the property and did not create anything in the nature of a legal estate in favour of such a beneficiary (p 40). In Re Potter, Deceased [1970] VR 352, Menhennitt J considered a will which devised and bequeathed a house to the testator's daughter: for her own use and benefit absolutely provided that my said son … may reside in the said house as long as he so desires. 19 Subsequently, the daughter desired to sell or mortgage the property and argued that she was entitled to do so having an unfettered estate in fee simple, and that this would terminate the son's right to reside in the house. After considering extensive authority, His Honour formed the view that the son had not been given a life estate but was given "a tangible right to reside personally" (p 354). 20 In Re The Will of Mayer [1995] 2 Qd R 150 the will contained words to the effect that there was a permission for a specified person, if she is residing at the property or takes up residence in the property within three months after the death, "to reside in the property during her lifetime". Mackenzie J referred to the primary duty of the Court as being to construe the words of the will for the purpose of ascertaining what the words used by the testator mean and his Honour concluded that the right given to the respondent was a personal right only which subsists while in the opinion of the trustee she resides permanently in the property (p 152). 21 In Re Hoppe, Deceased; Hoppe v McDavitt [1961] VR 381 at 387, Pape J considered a provision in a will which permitted the testator's widow and or his daughter: to continue to reside in the home occupied by them and himself at his death or in any other home purchased or leased thereafter as may be deemed expedient…. 22 That provision, his Honour thought, conferred no more than a personal right to reside in the house or in such other house as may be acquired for them by the trustees (p 387). His Honour formed the view that the will did not confer an estate in the land upon either the widow or the daughter. Emphasis was placed on the use of the word "reside". And this was contrasted with an alternative expression "use and occupy" which, his Honour thought, pointed more readily to a gift of a life estate. In the view of Pape J, the words "to reside" were indicative of a mere personal right to live in the house: Re Uren (unreported, 19 March 1958) per O'Bryan J; In re Gibbons v Gibbons [1920] 1 Ch 372 per Lord Sterndale MR at 379. On appeal, in the Supreme Court of Victoria, the Court in Re Hoppe, Deceased; Hoppe v McDavitt [1961] VR 381 at 401 said that: It is true that the right given them is personal in the sense that they must exercise the right themselves, they cannot transfer that right to anybody else. Apart from statutory power they cannot let the premises and so enjoy them without residing there. 23 And thus the appeal against the judgment of Pape J was dismissed. In Pagano v Ruello [2001] NSWSC 63 Simos J held that a provision granting "a right to reside in the home until such time as she marries" conferred a mere personal right of residence which had been lost when the defendant moved to another address.

24 There are two authorities in which a life estate in fee simple has been found in relation to wills more or less analogous to those in question here. The first is Ex parte Middleton [1983] 1 Qd R 170. The relevant gift was one giving a person "full use and enjoyment thereof during her lifetime" subject to certain conditions including the maintaining of the property in repair, paying the rates and the like. The parties accepted that the provision created an equitable life estate. McPherson J thought that that was correct (p 171). However, there are distinctions in the relevant text between that case and the present one, including the absence in Middleton of any requirement that the right would only subsist so long as there was residence in the disputed property. 25 Secondly, Bergin J held in Firriolo v Firriolo & Anor [2000] NSWSC 1039 that there was a conferral of a life estate, and not a mere right of residence which was said to have been abandoned in those proceedings. The critical question for her Honour was the effect of the use of the words "life estate". The provision in question granted a right of a son to reside in a particular premises "for his life" and made provision for another son if dying before the end of the life estate. Her Honour drew the distinction between the use of the term of "life estate" and a right to reside personally for life. She said at [21]: The right so given to the son is a right to reside personally in the house. Such a right, which has been commonly recognised in the decided cases, is often referred to as a personal right of residence. This expression means, I think, that the right is personal to the person given it and does not carry with it the right to let or to rents and profit. It is used in contradistinction to a life estate. 26 It was the use of the term "life estate" which was critical in the disposition of that case before Bergin J and amounted to what her Honour considered to be a "sufficiently clear indication" of what the deceased intended. In my view these latter two cases are distinguishable on the text or language of the will. Accordingly, I would hold that the plaintiffs are beneficial owners for an estate in fee simple in the land. Further and in the alternative they are the registered proprietors of the land under the Torrens title system and have a presumptive or perhaps conclusive right to title in the land. 27 It is significant that the Certificate of Title lists the plaintiffs as the registered proprietors of the property at 14 Ryan Crescent Riverview, but makes no mention of any interest held by Mrs Bell.

28 It is a basic tenant of the Real Property Act 1900 (NSW) that unregistered interests are extinguished by registered interests, unless protected by caveat or preserved as an exception to indefeasibility. Section 42 (1) explicitly provides: Notwithstanding the existence in any other person of any estate or interest which but for this Act might be held to be paramount or to have priority, the registered proprietor for the time being of any estate or interest in land recorded in a folio of the Register shall , except in case of fraud, hold the same , subject to such other estates and interests and such entries, if any, as are recorded in that folio, but absolutely free from all other estates and interests that are not so recorded … (my emphasis)

29 Accordingly, it may arguably be unnecessary to consider the nature of Mrs Bell's interest in the property at 14 Ryan Crescent Riverview, because regardless of whether it constitutes a life estate or merely a right to occupy for life, it has not been registered or protected by caveat, and consequently is defeated by the plaintiffs' title. Consequently, it cannot found the basis for any restriction or limitation upon plaintiffs' exercise of their proprietary rights, as contended for in of the submissions on behalf of the first and second Defendants. The joint judgment of Mason CJ, Dawson & McHugh JJ in Leros Pty Ltd v Terara Pty Ltd (1992) 174 CLR 407 at 419-420 is instructive in this regard: Although the failure to lodge a caveat may not result in a loss of priority in a competition between conflicting equitable interests, such a failure will, as previously explained, result in the destruction of the equitable interest as soon as registration of an inconsistent dealing constitutes the registration of a subsequent proprietor who takes free from the prior unregistered equitable interest. In this respect there is a distinction between a competition between unregistered equitable interests and a competition between a prior unregistered equitable interest and a subsequently registered estate or interest in the land. In the second case, the prior unregistered interest is defeated so that the contractual right on which that interest depends, though enforceable against the party who created it, is not enforceable as against the third party who becomes registered as the proprietor of the inconsistent estate or interest."

30 I conclude that the expression "continue to reside" normally denotes a mere personal right (Re Hoppe, Deceased; Hoppe v McDavitt [1961] VR 381 at 387, Pape J), whereas the broader expressions "use and occupy" or "have full use and enjoyment" are necessary to create a life estate (Ex Parte Middleton [1983] 1 Qd R 170 at 171 per McPherson J). 31 The plaintiff's Statement of Claim is upheld in respect of paragraphs 1-4 and the orders sought in paragraph 6 are warranted in law. 32 As Peter Butt makes clear in Land Law (North Ryde, NSW: LBC Information Services, 3rd edn, 1996) at [809], Torrens title land is in a "special position". The standard form conveys a transfer in fee simple and is effective, despite the absence of words of limitation.

33 The adoption of the Torrens title system was a radical South Australian innovation. Even a scholar writing in London in the nineteenth century (Karl Marx) noted it: As soon as Australia became her own law-giver, she passed, of course, laws favourable to the settlers, but the squandering of the land, already accomplished by the English Government, stands in the way. "The first and main object at which new Land Act of 1862 aims is to give increased facilities for the settlement of the people." ("The Land Law of Victoria" by the Hon. C. G. Duffy, Minister of Public Lands, Lond., 1862.)" Karl Marx Capital: A Critique of Political Economy. Volume 1, Book 1, The Process of Production of Capital. Translated from the third German edition by Samuel Moore and Edward Aveling and edited by Frederick Engels (Moscow: Progress Publishers, 1954 edition, p 724, footnote 1).

34 Although the use of extrinsic evidence in aid of the interpretation of wills has been "looked upon with suspicion", the courts have not adopted a rigid approach to exclusionary rules which might completely defeat the intentions of the testator. 35 Modern approaches to the construction of wills often emphasise the desirability of what the testator really intended, but even this "liberal" view does not empower a court to "re-write" the will to express an intention which has not been expressed at all (IJ Hardingham, MA Neave & HAJ Ford Wills and Intestacy in Australia and New Zealand, Sydney: The Law Book Co Ltd, 2nd edn, 1989, at 272).

36 In my view, facts which are rationally and materially relevant to the ascertainment of the testator's intention should be received by a contemporary court, although the question of the weight of those facts in the determination of intention must necessarily be decided in the context of a particular case. 37 In my reasoning progress, I have focussed upon the text of the will. It is true that there are some circumstances in which extrinsic evidence might be admissible, for example in cases of uncertainty about misdescription or other ambiguity. However, generally, the author's extrinsic declarations of the meaning of words does not constitute, as I understand it, the predominant principle (J D Heydon, Cross On Evidence, Sixth Australian Edition, Sydney: Butterworths, 6th edn 2000, at [39275]). 38 The defendants plead an estoppel by deed. They do not, certainly expressly, claim an estoppel by representation or promissory estoppel. Nor do they say that the deed by its operative provisions effected a disposition of an estate or interest in the property. What are the provisions in the deed of 7 September 1990? In consideration of a payment, the Bells are entitled to reside in the property whilst ever they are capable of being cared for at the property, the Godfreys agree to care for the Bells whilst ever the Bells are capable of being cared for at the property. I am of the view that any such suggestion that the parties conducted themselves on a basis, subsequent to entry into the deed, that there was a life estate has not been demonstrated by the evidence in proceedings before me. Accordingly, I would adopt and uphold the submission of the plaintiffs in this respect.

39 I note the restrictions contained in the rules of this Court in relation to leave to grant the writ of possession. Part 42 r 4 Possession of land

(1) A judgment for possession of land may be enforced by one or more of the following means: (a) writ of possession, and (b in a case in which rule 6 applies, but subject to rule 8: (i) committal, and (ii) sequestration.

(1A) Where a plaintiff claims possession of land against more than one defendant, judgment entered against a defendant in his absence shall not, unless the Court otherwise orders, be enforced against any defendant until judgment for possession of the land is entered against each defendant against whom the claim is made. cf RSC (Rev) 1965, O 13, r 4 (2); O 19, r 5 (2).

(2) A writ of possession to enforce a judgment for possession of land shall not be issued without the leave of the Court. cf RSC (Rev) 1965, O 45, r 3 (2).

(2A) A person may move for leave for the purposes of this rule without filing or serving notice of the motion.

(3) An application for leave for the issue of a writ of possession must show who was in occupation of each part of the land at the time of the commencement of the proceedings and who has been served with notice under Part 7 rule 8. cf RSC (Rev) 1965, O 45, r 3 (3) (a).

(4) Where a person is, at the time of commencement of proceedings for possession of land, in occupation of the whole or any part of the land and he is not a party to the proceedings and notice under Part 7 rule 8 is not served on him, the Court shall, when giving leave for the issue of a writ of possession, direct that the writ be restricted so as not to authorise disturbance of the occupation of that person.

(4A) If an originating process is amended by the addition of a claim for possession of land, the time at which proceedings for possession of that land are commenced shall, for the purposes of subrules (3) and (4), be taken to be the time at which the amendment is made.

(5) A writ of possession may include provision for enforcing the payment of: (a) money required to be paid by the judgment to be enforced by the writ, and (b) money recoverable under section 107 (1) of the Service and Execution of Process Act. cf RSC (Rev) 1965, O 45, r 3 (4).

40 These provide appropriate safeguards in relation to the defendants in these proceedings. 41 Belatedly, the plaintiffs have proposed declaratory relief in addition to the judgment sought in the pleadings. Both defendants oppose such a declaration. I am unpersuaded that it would have any utility. The judgment for possession is sufficient. 42 Accordingly, I would order judgment for possession, but not grant (at least at this stage) any writ for possession or leave to apply for a writ of possession and make orders in accordance with those sought by the plaintiff. The plaintiff should have their costs of proceedings before me (other than any costs incurred by the 3rd Defendant).

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