These proceedings concern the Estate of the late Nicholas Enright who died on 30 March 2003. The deceased had made a Will on 25 March 2003 ("the Enright Will") and Probate was granted of that Will on 19 November 2003.
The grant of Probate was in the following terms:
To…Dimity Kingsford Smith and Walter Ian Brooke Enright… the Executors appointed under the Will, save and except the property of which David Marr is the literary executor.
Mr Ian Enright and Ms Dimity Kingsford Smith were appointed Executors and Trustees by clause 3 of the Will. Ms Kingsford Smith retired from the role of Trustee on 7 June 2007 and Mr Enright has continued in the role. There is an issue relating to Ms Kingsford Smith's retirement, which I shall explain, but it is of very limited significance for the matters with which the Court is presently concerned. I shall, in the balance of these reasons, refer to Mr Ian Enright as the Defendant.
Nicholas, or "Nick" Enright was a well-known Australian playwright who wrote, amongst other things, 'On the Wallaby', and 'Blackrock', and he adapted 'Cloudstreet' (Tim Winton's novel) for the stage and wrote or co-wrote screenplays ('Lorenzo's Oil') and musicals, for example, 'The Venetian Twins'.
By his Summons, the Plaintiff (Mr David Marr), for whom Mr R. Lancaster SC appears, seeks orders in relation to the Estate and its administration. There are issues about the long delay in the commencement of these proceedings, but there are also issues relating to the Plaintiff's standing. Ms J. Needham SC appears for the Defendant.
The parties reached agreement that it was desirable for the Court to make an order pursuant to Uniform Civil Procedure Rules 2005 (NSW) r 28.2 and to determine, as preliminary questions, the following issues:
1. On the proper construction of the Will of the late Nicholas Enright, does clause 7.3 appoint the Plaintiff as an Executor within the meaning of s 41 of the Probate and Administration Act 1898 (NSW)?
2. If the answer to the first separate question is "Yes", on the proper construction of the Will, does the property the subject of the Plaintiff's appointment as an Executor under clause 7 of the Will include the copyright and other intellectual property in the deceased's works described in clause 7.4?
3. If the answer to the first separate question is "No", does the Plaintiff, as the "literary Executor" appointed in clause 7 of the Will, have standing to ensure the proper administration of the Literary Estate by the Executors named in clause 3 of the Will, including by seeking orders that the Executors named in clause 3 file and pass accounts relating to the administration of the Literary Estate.
The parties agreed on the consequences will be of the various alternative outcomes posited by the preliminary questions:
1. If the answer to question 1 is 'yes', and the answer to question 2 is 'no', then the Statement of Claim should be dismissed.
2. If the answer to question 1 is 'yes', and the answer to question 2 is 'yes', then the proceeding will proceed to a hearing.
3. If the answer to question 1 is 'no', and the answer to question 3 is 'no', then the Statement of Claim should be dismissed.
4. If the answer to question 1 is 'no', and the answer to question 3 is 'yes', then the Statement of Claim should be dismissed, without prejudice to any right of the Plaintiff to invoke that standing and seek relief in respect of the estate.
The relevant clauses of the Will are:
3. I APPOINT DIMITY KINGSFORD SMITH and WALTER IAN BROOKE ENRIGHT of 2 Spring Road, Malvern in the State of Victoria as joint Executors and Trustees of this my Will in relation to all my property and effects subject to clause 7 of this Will; and
4. I GIVE my Trustees the following powers to be exercised subject to my specific directions in this my Will:
4.1 to sell, call in, convert into money at such time or times and in such manner as they think fit with the power to postpone the sale, calling in, collection, conversion of the whole or any part of the property for such period as they in their absolute discretion think proper and to retain some or any part of the property in its present form of investment without being responsible for loss.
4.2 …(other powers are then set out but none of them are relevant)
7.1 I APPOINT HLA MANAGEMENT of 87 Pitt Street, Redfern in the State of New South Wales to continue to be my LITERARY AGENT as long as they are willing to represent my estate.
7.2 In the event that HLA MANAGEMENT is unwilling or unable due to insolvency or dissolution of its business to be my literary agent I APPOINT KATE RICHTER of 87 Pitt Street, Redfern in the State of New South Wales to continue to represent me if she so wishes or to place my work with another literary agent in consultation with my LITERARY EXECUTOR, DAVID MARR of 122 Denison Street, Camperdown in the State of New South Wales.
7.3 I APPOINT DAVID MARR of 122 Denison Street, Camperdown in the State of New South Wales as my LITERARY EXECUTOR.
7.4 I DIRECT that all copyright and intellectual property in my works, including where that copyright or intellectual property is shared with others, is to remain with my estate and the income derived from that intellectual property is to be distributed pursuant to Clause 7.5.
7.5 I GIVE AND BEQUEATH:
(a) to the National Institute of Dramatic Art of Anzac Parade, Kensington in the State of New South Wales, two thirds of any income so derived; and
(b) to the Actors' Benevolent Fund of 245 Chalmers Street, Redfern in the State of New South Wales, on third of any income so derived.
7.6 I DIRECT that the reasonable costs and expenses of my Executors and Trustees, my Literary Executor and Sandy Gore, in relation to the administration of my estate are testamentary expenses to be paid by my estate before any gift in this Will.
Clause 8.1 and 10 of the Will deal with the residue of the Testator's Estate, but it is agreed that those paragraphs are not dealing with his Literary Estate.
I shall refer to the property described in clause 7.4, i.e. the copyright and intellectual property in the Testator's works, as the "Literary Estate".
The only beneficiaries of the Literary Estate are the National Institute of Dramatic Arts ("NIDA") and the Actors Benevolent Fund ("ABF").
It should be noted that by clause 5 and 6 of the Will, whereby the Testator gave details of particular pieces of art and photographs to named individuals, and in respect of the balance of his personal effects, the Testator appointed Ms Sandy Gore to "assist my Executors and Trustees" dispose of them.
Both Mr Lancaster and Ms Needham agreed that clause 7.6 ought to be viewed as a new clause, rather than a subclause of clause 7.
Originally when application for Probate was made, it was made by the Defendant, Ms Kingsford Smith and the Plaintiff. The Probate Registrar declined to make a grant of Probate in the form requested, indicating that the Summons for Probate should be amended to have the grant sought in the form which it was subsequently granted: see Exhibit A, Tabs E1 and E2. Both sides draw attention to the affidavits which were filed in support of the Summons. In their joint affidavit of 10 October 2003, Ms Kingsford Smith and the Defendant deposed (see: Exhibit A, Tab A1):
We are the executors named in the Will in relation to all of the Estate, including the Literary Estate, but subject to the rights and responsibilities of the Literary Executor appointed under the Will, David Marr"
In his affidavit of 29 October 2003, the Plaintiff deposed:
4. I am the Literary Executor named in the Will.
…
10. If I am granted Probate of the Will of the deceased, in relation to that part of the Estate being all literary, dramatic, musical or artistic works, sound recordings or photographs in which the deceased has either sole or joint rights ("the Literary Estate"):
(a) I will administer the Literary Estate according to law; and
(b) I will:
(i) verify and file; or
(ii) verify, file and pass
accounts relating to the Literary Estate of the deceased within 12 months from the date of grant if so required by the Court.
Both parties accept that what was said by the Plaintiff or the Defendant or determined by the Probate Registrar is not a determination of the issue which the Court must now decide.
I note that the Estate was stated in the application for Probate to have a net value of $2,107,720.71, of which the "Literary Estate" was said to have a value of $325,698.
The main contest between the parties revolves around the following point: was the Testator's appointment of the Plaintiff as his "Literary Executor" effective to make him an Executor for the purpose of s 41 of the Probate and Administration Act 1898 (NSW) ("the PAA"). Section 41 provides:
The Court may, if it thinks fit, grant probate to one or more of the executors named in any will, reserving leave to the other or others who have not renounced to come in and apply for probate at some future date.
The Plaintiff's position is that the Testator must be taken to have appointed him to be the Executor for one part of his Estate, namely the Literary Estate. The Defendant's position is that the Testator appointed him as Executor and Trustee for the whole Estate, including the Literary Estate.
The contest between the parties is one of construction of the words used by the Testator in his Will, but I should note that:
1. The Defendant does not dispute that a testator can appoint one person as an executor over a specific property or type of property and a second person as executor over the rest: see Re Wills of Mary Clark (1903) 4 SR (NSW) 248 per Walker J and In the Goods of Harris (1870) LR 2P & D 83.
2. The Defendant, therefore, does not dispute that a person can be appointed executor over the literary estate of a testator, but contends that there is a significant difference between appointing someone as "Executor of my Literary Estate", on the one hand, and as "my Literary Executor", on the other. The latter, it is said, has no clear meaning or context and does not entitle a person to be appointed as executor over the literary property.
I have referred to the fact that the contest is one of construction of the Will. There was a large measure of agreement as to the approach which the Court must take to construction of a will where there is a dispute as to its meaning.
In Fell v Fell (1922) 31 CLR 268 Isaacs J pp 273 - 276 set out the following, what he described as "incontestable" principles:
(1) "Every will must by law be in writing, and it is a necessary consequence of that law that the meaning must be discovered from the writing itself, aided only by such extrinsic evidence, as is necessary in order to enable us to understand the words which the testator has used" (Lord Cranworth in Abbott v. Middleton [3]; Lord Wensleydale in the same case [4] ).
(2) "The instrument … must receive a construction according to the plain meaning of the words and sentences therein contained. But … you must look at the whole instrument, and, inasmuch as there may be inaccuracy and inconsistency, you must, if you can, ascertain what is the meaning of the instrument taken as a whole in order to give effect, if it be possible to do so, to the intention of the framer of it" (Lord Halsbury L.C. in Leader v. Duffey [1]; Ward v. Brown [2] ; Buckley L.J. in Kirby-Smith v. Parnell [3] ).
(3) "If the will shows that the testator must necessarily have intended an interest to be given which there are no words in the will expressly to devise, the Court is to supply the defect by implication, and thus to mould the language of the testator, so as to carry into effect, as far as possible, the intention which it is of opinion that the testator has on the whole will, sufficiently declared" (Towns v. Wentworth [4] ; Hawkins on Wills, 2nd ed., at p. 6).
(4) An inference cannot be made "that did not necessarily result from all the will taken together" (Sir R. P. Arden M.R. in Upton v. Ferrers [5]). A necessary inference is one the probability of which is so strong that a contrary intention cannot reasonably be supposed (James L.J. in Crook v. Hill [6]).
(5) "We cannot give effect to any intention which is not expressed or plainly implied in the language of" the "will" (Lord Watson in Scalé v. Rawlins [7]). "You have no right to fancy or to imply, unless there be something within the four corners of the will which is not only consistent with the implication you make, but which could hardly stand, if at all, in the will, without that implication being made. That is what is called necessary implication, and legitimate implication, in contradistinction to gratuitous, groundless, fanciful implication" (Lord Brougham L.C. in Langston v. Langston [8]).
(6) "If the contents of a will show that a word has been undesignedly omitted or undesignedly inserted, and demonstrate what addition by construction or what rejection by construction will fulfil the intention with which the document was written, the addition or rejection will by construction be made" (Knight Bruce L.J. in Pride v. Fooks [9]).
(7) "When the will is in itself incapable of bearing any meaning unless some words are supplied, so that the only choice is between an intestacy and supplying some words; but even there, as in every case, the Court can only supply words if it sees on the face of the will itself clearly and precisely what are the omitted words, which may then be supplied upon what is called a necessary implication from the terms of the will, and in order to prevent an intestacy" (Page Wood V.C. in Hope v. Potter [1]).
(8) "There are two modes of reading an instrument: where the one destroys and the other preserves, it is the rule of law, and of equity, following the law in this respect (for it is a rule of common sense …), that you should rather lean towards that construction which preserves, than towards that which destroys. Ut res magis valeat quam pereat is a rule of common law and common sense; and much the same principle ought surely to be adopted where the question is, not between two rival constructions of the same words appearing in the same instrument, but where the question is on so ready an instrument as that you may either take it verbally and literally, as it is, or with a somewhat larger and more liberal construction, and by so supplying words as to read it in the way in which you have every reason to believe that the maker of it intended it should stand; and thus again, according to the rule ut res magis valeat quam pereat, to supply, if you can safely and easily do it, that which he per incuriam omitted, and that which instead of destroying preserves the instrument; which, instead of putting an end to the instrument and defeating the intention of the maker of it, tends rather to keep alive and continue and give effect to that intention" (Lord Brougham L.C. in Langston v. Langston [2]).
(9) If on reading the will you can see some mistake must have happened, "that is a legitimate ground in construing an instrument, because that is a reason derived not dehors the instrument, but one for which you have not to travel from the four corners of the instrument itself" (Langston v. Langston [3]).
(10) "The mind never inclines towards intestacy; it is a dernier ressort in the construction of wills" (Lord Shaw in Lightfoot v. Maybery [1]). "In ascertaining the intention, I ought to a certain extent - we all know what the expression means - to lean against an intestacy, and not to presume that the testator meant to die intestate if, on a fair construction, there is reason for saying the contrary" (Buckley L.J. in Kirby-Smith v. Parnell [2]).
At p 276 Isaacs J also said:
With these principles in mind, I examine the will itself, remembering, as Chief Justice Wilmot quaintly said in Dodson v. Grew [3], "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.
There are several other cases on construction to which attention was drawn, Perpetual v Wright (1987) 9 NSWLR 18, 33; Muir v Winn [2009] NSWSC 857 at [3], [4], [23] and [24]; Coorey v Coorey (22/02/1986 NSWSC Unreported); Re Estate Polykarpou [2016] NSWSC 409 ("Polykarpou"); and Carroll v Perpetual Trustee Co Ltd (1916) 22 CLR 423, p 433 per Isaacs J and Rich J. In Polykarpou Lindsay J summarised nine principles governing construction of the will (g) - (i) dealt with issues relating to charities, a point not of present concern. I set out the summary contained in 64 - (f) of Polykarpou:
For the purpose of these proceedings, the principles governing construction of the will to which I have had regard can be summarised in the following terms:
(a) As confirmed by Bryson J in Hatzantonis v Lawrence Cox [2003] NSWSC 914 at [6]-[8], the starting point is the following statement in Perrin v Morgan [1943] AC 399 at 406:
… the fundamental rule in construing the language of a will is to put on the words used the meaning which, having regard to the terms of the will, the testator intended. The question is not, of course, what the testator meant to do when he made his will, but what the written words he uses mean in the particular case - what are the "expressed intentions" of the testator."
(b) As remarked by Powell J in Coorey v Coorey (NSW Supreme Court, 22 February 1986, unreported), repeated by Bryson J in Perpetual Trustee Co Ltd v Wright (1987) 9 NSWLR 18 at 33 and adopted in subsequent cases (as illustrated by Hatzantonis v Lawrence Cox [2003] NSWSC 914 at [10] and Lockrey v Ferris [2011] NSWSC 179 ; 8 ASTLR 529 at [44]-[45]), the Court's "task is, first, if it be possible, to ascertain what was the basic scheme which the deceased had conceived for dealing with his estate and then, so to construe the will as, if it be possible, to give effect to the scheme so revealed.
(c) Evidence of the circumstances surrounding the deceased is admissible to assist in construction of her will so that the Court can place itself in her "arm-chair" when she made the will: Boyes v Cook (1880) 14 ChD 53 at 56. The Court is entitled to put itself in the position of the deceased, and to consider all material facts and circumstances known to her with reference to which she is to be taken to have used the words used by her in her will: Allgood v Blake (1873) LR 8 Exch 160 at 162. Accordingly, the Court may admit evidence of the deceased's habits and knowledge of persons or things: Parry v Haisma [2012] NSWSC 290 at [11].
(d) The will must be construed as a whole: Fell v Fell (1922) 31 CLR 268 at 273-274.
(e) By s 32 of the Succession Act 2006 NSW, evidence extrinsic to the will can be admitted to assist in interpretation of the language used in the will if that language makes the will, or any part of it, meaningless, ambiguous on the face of the will, or ambiguous in the light of surrounding circumstances.
(f) The Court leans against an intestacy, and does not presume that a testator meant to die intestate if, on a fair construction, there is reason for saying the contrary: Fell v Fell (1922) 31 CLR 268 at 275-276.
There have been several cases in which the words "literary executor" have been used. In re Orwell's Will Trusts, Dixon & ors ats Blair [1982] 1 WLR 1337, the Testatrix (the wife of Eric Blair who wrote under the pseudonym George Orwell), appointed a literary agent as her "literary executor" directing her Trustees to give into his charge all copyright film and television rights derived from the Estate of her late husband and the benefit of all existing contracts and directed that he should have full power to exploit her Literary Estate by the grant of publishing licenses and rights. The contest in that case arose over the question of whether the literary executor was entitled to charge and, if so, on what conditions.
In Woodhouse v Cohen (1950) 198 Misc, 1000, 101 NYS 2d 675, a plaintiff calling himself "Literary Executor" for a deceased person brought a claim in respect of books that he had purchased at auction. Eder J dismissed the case and noted:
As to plaintiff suing in the capacity of a 'Literary Executor', there is no such entity in the law. A person may be designated executor solely for the purpose of administering literary property. Plaintiff does not allege that he was appointed executor, nor does he allege he was appointed 'literary executor' by the Surrogate's Court in which decedent's will was probated; and it is stated, and not denied, that he was not appointed. His complaint, therefore, as literary executor, is throughout defective and must fail in behalf of the estate.
In Sharp v A-G (NSW) [2015] NSWSC 1580 the Court was concerned with the Estate of Martin Sharp in which the Testator had appointed two persons as his "literary or artistic directors", defined as the Literary Executors, who were to:
Work with my testamentary executors in protecting my rights and copyright in relation to all my works and artworks of whatsoever nature and wheresoever situate with a view to promoting and advancing the purpose of the Trust created in clause 4 below, or other trusts created in substitution by this my Will.
The Court (Stevenson J) was called on to decide whether or not the Trust established was charitable, but it was not contended that the literary directors were Executors under Mr Sharp's Will.
In the Estate of Holland [1936] 3 ALL ER 13 was a case in which four persons had been appointed as executors and trustees of Mr Holland's Will, and a fifth was appointed as "literary executor" in respect of certain "letters and papers" with power to destroy them if he saw fit in his absolute discretion. The relevant UK Act did not permit more than four executors to be appointed and the Court upheld the Probate Registrar's decision that one of the executors was required to renounce probate.
In his learned paper 'The Literary Executor and the Lighthouse' ("the Lighthouse Paper"), delivered at the Society of Trust and Estate Practitioners (STEP) NSW Branch on 16 November 2016, Justice Lindsay provided a detailed analysis of matters pertaining to literary executors, and noted that the term has only come to be seen in wills in relatively recent times. His Honour pointed out that 'literary executor' does not necessarily mean executor, and is not a legal term. He pointed out that no authorities have dealt with this question. The Lighthouse Paper contains the following:
15 In days of old, the prime role of a "Literary Executor" may have been to collate and edit papers for publication, and to destroy those deemed not suitable for publication. In a less modest, more commercial age that role may have moved the role of a "Literary Executor" away from that of a mere editor and towards that of an entrepreneur…
25 The Oxford English Dictionary offers two definitions of "Literary Executor", found as subordinate entries under the respective entries for "Literary" and "Executor".
26 Under the title "Literary", a "Literary Executor" is defined as "a person entrusted with a dead writer's papers and copyrighted and unpublished works." Pointedly, here, there is no necessary connection with the office of an executor as understood in probate law.
27 Under the title "Executor", the following definitions appear:
"[Executor]… A person appointed by a testator to execute or carry into effect his will after his decease.
Literary executor.… One who is entrusted with the care of the papers and unpublished works of a literary man."
28 Here, too, there is no necessary connection between a "Literary Executor" and the office of an executor as understood in probate law.
29 In an Australian context, the term "Literary Executor" might best be envisaged as a lay term of convenience dependent upon context rather than as a legal concept. In Australia, the expression "Literary Executor" is not a term of art or possessed of a universal meaning. Contrary to expectations in some quarters, it is not a term generally known to probate lawyers.
30 The position may be otherwise in the United States of America. Black's Law
Dictionary (10th ed, 2014) includes, in its entry for "Executor", a sub-entry for
"Literary Executor": "Copyright. A limited purpose executor appointed to manage copyrighted materials in an estate"…
36 In the abstract, there is no settled meaning for either the adjective "Literary" or the noun "Executor" when the two are joined together in an environment in which, with rapidly changing technology, concepts of "property" and "the creative arts" are liable to change, and a variety of legal mechanisms are available for the management of property.
37 A Literary "Executor" might not necessarily be an "executor" in the probate sense of that term at all. He, she or it might be nothing more or less than an agent, or some other sort of representative, or merely a service provider. The Tolkien Estate, under the direction of the author's son Christopher, appears to operate through a corporate structure. If, for a time, an executor (in the probate sense), then, in conventional probate terminology, upon completion of executorial duties, a Literary Executor will become, in any continuing arrangement, a trustee. An author with an over-optimistic ambition to control future events might curtail the process by establishing an inter vivos trust, rather than a testamentary trust, attributing the title "Literary Executor" to the trustee nevertheless.
38 The nature of the office, and the role, of a "Literary Executor" must ultimately depend upon a variety of case-specific factors, including: (a) the nature of property required to be managed by such a person (eg, merely a physical library of books or one or more manifestations of copyright in literary work); (b) whether that property is liable to change in character in the foreseeable future (e.g., with renewal or reversion of a right to copyright, or with a grant or expiry of a contractual licence to copyright material); (c) the management objectives of the person, or persons, empowered to deal with the property to be managed (be the objective enduring fame, the encouragement of research or profit maximisation, for example); (d) plans for disposition of the property to be managed, or income that may be derived from it; and (e) the time period over which the property, and associated income, is proposed to be managed…
85 If a will appoints a "Literary Executor" to a nominated part of a deceased's estate, a vehicle through which the Court may accommodate that appointment in administration of the estate is a grant of probate limited to that property. The general rule is that effect is given to the expressed intention of a testator; if an executor is appointed for portion only of an estate, the probate granted to him will be limited to that portion: Re Wills of Mary Clark (1903) 4 SR (NSW) 248 at 250.
Annexed to the Lighthouse paper are the main provisions in the will of a famous Australian author, now deceased. With names omitted, I set out clauses 3(a) - (f) of that will:
3. (a) I APPOINT … of … Darling Point in the said State (hereinafter called 'my Literary Executor') to be my Executor in respect of my published and unpublished literary works (including any original documents embodying any such work) and any copyright or interest in copyright therein that I may own at the date of my death and the benefit of any subsisting licence or other subsisting contract concerning them or any of them.
(b) I DIRECT that my Literary Executor shall administer any licence or contract referred to in sub-clause (a) of this clause and shall collect and recover any moneys payable under any such licence or contract.
(c) Subject to the subsequent provisions of this my Will I DIRECT that my Literary Executor shall have power to realise my literary works, copyrights and interests in copyrights by sale, assignment or disposition of them or any of them or any interest therein or thereunder or by the grant of any licence or right for, in each and any case, such consideration as she may think proper, including royalties to be paid to my Literary Executor.
(d) I DIRECT that my Literary Executor shall be entitled to reimbursement of out-of-pocket expenses incurred by her in the performance of her duties under my Will and to commission at the rate of ten percent (10%) of corpus and ten percent (10%) of income collected by her in the performance of her duties and the exercise of her powers under this clause.
(e) I DIRECT that the moneys collected by my Literary Executor after deduction of the moneys payable to my Literary Executor under sub-clause (d) of this Clause shall be paid to my Trustee and shall bear the same character of capital or income when so paid as they bore when collected by my Literary Executor.
(f) I DIRECT that my Trustee shall be empowered to appoint any person or persons in its absolute discretion in place of or in addition to the said […] as my Literary Executor PROVIDED ALWAYS THAT during the lifetime of the said […]no such appointment shall be made without the consent of the said Barbara […].
The Defendant refers to these clauses contending that it is precisely that sort of detail which is missing in the present Will, and the absence of which encourages the conclusion that the Plaintiff was not appointed as an Executor, in the sense required under Probate law.
The scheme, relevant for present purposes, was established by clause 7 and each of subclause 7.1 - 7.5 of the Will dealt with that Literary Estate. The means of dealing with the Literary Estate had these components:
1. The Testator wanted HLA Management to continue to act as literary agent for his works for so long as that company was willing to do so.
2. If HLA was not willing to do so, he wanted Ms Kate Richter to continue to represent him or, if she did not wish to do so, then she was to choose a replacement literary agent in consultation with the Plaintiff.
3. The Plaintiff was to be the Executor of the Literary Estate.
4. The Testator wanted all his copyright and intellectual property "to remain with my estate" and the income so derived to be distributed as specified in clause 7.5.
5. Clause 7.5 specified that the income from the literary property so held was to be divided two thirds to NIDA and one third to ABF.
6. The appointments of HLA and, alternatively, Ms Richter as 'my literary agent' would have been better expressed as an appointment that the Testator wanted to be made on behalf of the Estate, but the meaning is clear, and no issue has arisen in relation to those wishes.
The Defendant has advanced a number of arguments against the construction for which the Plaintiff contends:
1. There is no necessary connection between the office of an executor, as understood by Probate law, and the office of Literary Executor relying on [26] - [27] of the Lighthouse Paper.
2. "Literary Executor" has no special meaning in Probate law (see: [87] of the Lighthouse Paper) and, if a testator wished to embrace the concept of a 'literary executor' with a limited grant of Probate to that person and a general grant to another, particular care is required to ensure clarity in the instructions and efficient management model: see [107] of the Lighthouse Paper. The Testator would have to define the contents of the Literary Estate and make it clear that the person appointed is to have the powers of an executor.
3. The words "remain with my estate" are used in 7.4.
4. There are no executorial or trustee powers given to the Plaintiff as Literary Executor (except for the consultative role in clause 7.2). There would be no need for clause 7.2 if the Plaintiff were an executor in the legal sense because the incoming person would be an agent of the Estate.
5. Clause 7 does not expressly state that the literary property is to be vested in the Literary Executor, or even that he is to be appointed Literary Executor "in relation to my literary property", in contrast to clause 3, which refers to "all of my property and effects subject to clause 7 of this Will."
6. The Plaintiff's role as Literary Executor is not defined and the only specific duty mentioned is to be the consultant to Ms Richter should neither HLA Management nor Ms Richter wish to continue as literary agent for the Testator's works.
7. The Plaintiff is not expressly appointed as Trustee, whereas the Defendant is.
8. There is no express gift of property to the Plaintiff as Executor.
9. The words in clause 4, "subject to clause 7 of this Will" do not excise the property from the general gift to the Executors in that clause, but rather show that the Testator wanted to somewhat restrict the freedom of the Executors.
10. Clause 4 gives the Executor significant power as Trustee.
11. Ms Kingsford Smith retired as Trustee and she could only have done so if her executorial functions were completed because an executor cannot resign without leave of the Court.
12. There is no need to resort in construction of the will to the principle of 'preservation' by construction because, on the Defendant's construction, there is no intestacy or partial intestacy.
The Plaintiff's response to these matters is as follows:
1. "Subject to clause 7 of this Will" in clause 4 is an important qualification to the appointment in clause 3. It limits the property in respect of which the Defendant is named as joint Executor and Trustee. It asserts something for the executor with one hand and disclaims in the same clause.
2. "Subject to" effects a carve out of the literary property from the rest of the property to which the Defendant was appointed.
3. The Executor's contention that the Plaintiff's only role as Literary Executor was the limited consultation one in clause 7.2 is not supported in the text of the clause because there would have been no need to appoint him as Literary Executor if his only role was that specified in clause 7.2.
4. The words "is to remain with my estate" do not assist the Executor's contentions- it should be read not as a direction that the literary property of the Testator was to be controlled by the Executor, as opposed to the Literary Executor, but rather as a direction to the Literary Executor that he was not to sell the literary property.
5. In paragraph 85 of the Lighthouse paper, Lindsay J accepts there can be a grant of Probate of identified property if that is truly the intention of the testator.
6. No word used in a will has a settled meaning in law in the abstract.
7. The Will must be construed as a whole and consideration given to the plan which is manifest in the Will.
8. Distributions pursuant to clauses 5, 6, 8 and 9 did not include the distributions in clause 7.
9. Whilst clause 7 does not confer the powers on the Literary Executors as those found in clause 4, the powers in clause 4, which are bestowed on the Defendant, are not well suited to the role of a literary executor, and most of them are inconsistent with clause 7.4 and 7.5 There is no power given to the Defendant to license copyright material.
10. Whilst it is true that clause 7 does not make an express gift of property to the Literary Executor, nor is there an express gift of property to the Executor either.
11. The plaintiff does not accept that Ms Kingsford Smith's executorial duties were over. The fact of her resignation does not establish that she was entitled to do so.
I have referred to the fact that whilst the Will appoints the Plaintiff as Literary Executor, it does not appoint him as Trustee. This difference is one of the arguments to which the Defendants refers on construction of the Will. It led me to enquire of the parties what would be the position if, as the Plaintiff contends, he is the Executor of the Literary Estate, since the Will expressly contemplates that the literary works will not be sold and the Testator must have envisaged that there would be ongoing management of the literary works. Copyright subsists for a period of 70 years from the death of an artist or writer: see s 33 of the Copyright Act 1968 (Cth).
Mr Lancaster has, in separate additional written submissions ("the PAS"), delivered in accordance with the timetable agreed upon at the hearing, addressed the point. He contends that it is not something that falls for determination because the question for determination is solely one of construction. Nevertheless in the submissions he provides reasons and authority for the conclusion that the absence of express bestowal of the title 'Trustee' and powers is no great impediment.
I summarise the points made in the PAS:
1. An executor who has performed all of his or her executorial functions in respect of ascertained property may become a trustee of that property merely by continuing to hold the property after those duties have been performed: see Pagels v MacDonald (1936) 54 CLR 519 at 526.
2. After the executorial functions are over the executor becomes a constructive trustee: see McCaughey v Commissioner of Stamp Duties (1945) 46 SR (NSW) 192 at 209 (Jordan CJ, Halse Rogers and Roper JJ) and see Re Rogowski (decd); Estate of Biesiada (2007) 248 LSJS 274 at [22] per Gray J.
3. Beneficiaries only have beneficial interest in specific property once the estate has been administered: see Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306 pp 312 - 314 and Commissioner of Stamp Duties (Queensland) v Livingston [1965] AC 694.
4. An executor could, pursuant to s 11 of the Trustee Act 1925 (NSW) ("the Trustee Act"), declare that he or she has ceased to hold the property as executor and will thereafter hold it as trustee. Section 11 is not limited to executors who are expressly named as trustees. Mr Lancaster refers to Official Trustee in Bankruptcy v Robin Ann Jones [2003] NSWSC 343 at [9] - [10] in which Gzell J held that s 11 was permissive and not a prerequisite for an executor to become a trustee.
5. Alternatively, he submitted, the executor can apply for directions relying on s 63 of the Trustee Act, which provides by s 63(1):
(1) A trustee may apply to the Court for an opinion advice or direction on any question respecting the management or administration of the trust property, or respecting the interpretation of the trust instrument.
Ms Needham, in her submissions in reply to the PAS, dated 10 November 2017, did not challenge any of the principles adverted to by Mr Lancaster. Her point rather was that the Plaintiff was not an executor or trustee and so could not make himself a trustee by, for example, reliance on s 11. Ms Needham repeated her contention that the question of the Plaintiff's standing if he was not an executor need not be answered. Mr Lancaster provided a written response to those submissions.
Whilst I accept that an executor can become a trustee even if the will does not expressly provide for this to occur, it seems to me that the absence of an express appointment of the Plaintiff as a Trustee is, on the issue of construction, a matter that supports the Defendant's contention that the Testator did not intend to appoint the Plaintiff as his Executor and Trustee to administer the Literary Estate. I take it into account, but I do not think it is decisive.
In my view the Will, taken as a whole, reflects a scheme by which relevantly:
1. The literary property was to be treated as quite distinct from all other property in the Estate.
2. The literary property, according to the Testator's wishes, was not to be sold, but the royalties, or other earnings from the literary property, were to provide the outcome to be distributed to the beneficiaries NIDA and ABF (in the specified proportions).
3. The literary property was to be controlled or managed by the Literary Executor i.e. the Plaintiff.
Of the propositions in [40] only (3) is controversial. My reasons for taking the view that (3) is included are:
1. Clause 7 (apart from clause 7.6 as to which see [13] above) deals exclusively with the Literary Estate and that is the clause which appoints the Plaintiff in a role (either a very limited one, as the Defendant contends, or a much wider, one as the Plaintiff contends).
2. The phrase "Literary Executor" either means executor of the Literary Estate or something else. The few cases of wills in which the phrase has been used and the Oxford English Dictionary cited in the Lighthouse Paper suggest different possible meanings or functions of the person appointed as a literary executor i.e:
1. The person who is "entrusted with a dead writer's papers, copyrighted and unpublished works" (see: [26] of the Lighthouse Paper citing the Oxford English Dictionary) who will bring together all of the writings of the deceased whether published of not and, in respect of the latter, who will decide what should be destroyed and what should be the subject of an attempt to publish;
2. The person who will manage the literary works - giving instructions to a literary agent if there is one, liaising with publishers, licensing and/or selling copyright works if the testator has not expressed a wish against sale;
3. The person who will deal commercially with the literary works and manage the income and distribution by sale, assignment or licensing of the literary property or income from the literary work that has been sold;
4. All of the above.
and there was no restriction or limitation imposed on what the Literary Executor was to do other than that the Testator wanted copyright in his works to remain with the Estate. There was no need to appoint the Plaintiff as "Literary Executor" if his only role was limited to a consultative one. I draw from the appointment of the Plaintiff as the "Literary Executor" that the Testator had in mind a larger scope for the Plaintiff than the merely consultative role. Ms Needham at T60.10 - T60.18 seemed to accept that the Plaintiff's role was not limited to that one power, but was unclear as to what additional role he was, on the Defendant's contentions, meant to have.
1. It is agreed that a testator can appoint one person to be his or her executor over a particular property or class of property and another over the balance of the estate, and it was accepted that literary works is a class of property over which a separate executor can be appointed. Given the very special nature of literary works and their management this is not at all surprising.
2. Clause 3, which appointed the Defendant (as Executor and Trustee) was expressed to be "subject to clause 7 of this Will."
3. Clause 4, in bestowing powers on "the Trustees", said that those powers were to be "subject to my specific directions in this my Will", and the powers do not include any important powers relevant to copyright material, particularly licensing.
4. Clause 7.6 provides for the Literary Executor to be remunerated for his reasonable cost and expenses as Literary Executor. That suggests that the Testator thought there would be costs of the Literary Executor and it is hard to imagine that he thought there would be any cost in the Literary Executor being consulted by Ms Richter (which, as I have noted, would only occur if HLA Management was unwilling or unable to continue as literary agent and Ms Richter did not wish to undertake that role).
5. Taking all of the matters into account, in my view, the appointment of the Plaintiff as Literary Executor carries the necessary and legitimate implication that the Testator intended the Plaintiff to be the Executor of the Literary Estate.
It follows that the Testator intended to appoint the Plaintiff as Executor of the Testator's Literary Estate, i.e. the copyright and intellectual property in the Testator's works, thus permitting a grant of Probate to be made to the Plaintiff in respect of that property, pursuant to s 41 of the PAA. It follows also that the answer to questions 1 and 2 are "yes" and the matter should proceed to a hearing. Question 3 does not arise.
I record my gratitude to counsel for their most detailed and helpful submissions, both oral and written.
I will give counsel an opportunity to address me on the issue of costs.
[2]
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Decision last updated: 29 November 2017