Gilbert v Fitzpatrick [1927] HCA 2

Will - Construction - Legacy or debt - Direction to pay executor-trustee debt amount of yy ©, oF A

which he will disclose to other trustees - Proof of debt. 1927.

A testator by his will, after directing payment of his debts, declared that F. er OBART,

whom he appointed one of his executors and trustees, should be paid "the i Feb. 14, 16.

debt or sum of money owing by me to him the amount of which" F. "will # disclose to my other trustees."

Held, by Knox C.J., Higgins and Rich JJ., that the words of the will were not sufficient to constitute a legacy, but that the testator intended to acknow- ledge that he was indebted to F., and (Higgins J. dissenting) that F. was entitled to payment of the sum stated by him to be owing.

Decision of the Supreme Court of Tasmania (Ewing J.) varied.

By his will William Francis Gilbert deceased appointed Ann Mary Gilbert, Philip Henry Gilbert and William George Fitzpatrick his executors and trustees. After a direction to his trustees to pay his just debts and funeral and testamentary expenses, the will contained the following provision : " I declare that the said William George Fitzpatrick is to be paid out of my estate the debt or sum of money owing by me to him the amount of which the said William George Fitzpatrick will disclose to my other trustees."

'After the testator's death probate of the will was granted Ann Mary Gilbert and Philip Henry Gilbert. William _ Fitzpatrick, who had renounced probate, gave notice to the and executor that the debt or sum of money owing by the testator to him at the time of his death was £410 10s. 4d., and requested them to pay that sum to him forthwith. The executrix and executor having refused to do so, Fitzpatrick issued an originating summon in the Supreme Court of Tasmania asking for the determination the question (as amended at the hearing) whether upon the tt we construction of the will the declaration above set out constituted a legacy of a sum of such amount as Fitzpatrick should so disclose, 'An order was also asked directing the executrix and executor pay to Fitzpatrick the sum of £410 10s. 4d.

The summons came on for hearing before Ewing J., who made an order declaring and ordering (1) that upon the true construction of the will the declaration above quoted " constitutes a legacy to the said William George Fitzpatrick of a sum of such amount as the said William George Fitzpatrick should disclose to " the exer and executor, and (2) that the executrix and executor should due course of administration pay to William George Fitzpatrick sum of £410 10s. 4d., being the amount disclosed by him to the executrix and executor " pursuant to the declaration aforesaid."

From that decision Ann Mary Gilbert and Philip Henry Gilbe now appealed to the High Court.

Griffiths, for the appellants. By the testamentary direction the creditor is not given the privilege of exclusively determining his own debt. On the true construction of the words themselves, amount which is to be paid is "the debt or sum of money 0 The qualifying clause has two meanings. Either the prev direction to pay the debts includes this or it does not. If it do then the words are idle ; if it does not, the words are substantive dispositive on the face of them. This is not a legacy: it is not conformity with the Wills Act, requiring a will to be in writing to be attested properly. There being a direction in the will to pay debts, the only way of reconciling the two provisions is to re

the payment of the debt as a debt. [Counsel referred to Trustee Act 1898 (Tas.), sec. 38; Jarman on Wills, 6th ed., pp. 469-479 ; In re Conn; Conn v. Burns (1).

Shields (with him A. I. Clarke), for the respondent. If the clause means anything, it means that Gilbert realized that there was a debt due to Fitzpatrick, that it might damage Fitzpatrick's claim if he had to collect it in the ordinary way and therefore that his statement of the amount was to be sufficient proof of the debt. Whether the declaration constituted a legacy or not does not much concern the respondent. If that is the meaning of the clause, when Fitzpatrick made his disclosure of the amount that amount ought to be paid unless the executors can establish fraud.

Kyox C.J. anp Rica J. This is an appeal from an order of Ewing J. declaring that the respondent is entitled under the will of William Francis Gilbert deceased to a legacy of a sum of such amount as the said respondent should disclose as the debt or sum of money owing by the testator to him.

The appellants are the executors and trustees of the will of William Francis Gilbert. The respondent was appointed by the will an executor and trustee, but renounced probate. It appears from the uncontradicted evidence that the testator and the respondent had been, for many years prior to the testator's death, close personal friends and that during a period of some twenty-five years there had been financial transactions between them. By his will the testator directed his trustees to pay his just debts and funeral and

_ testamentary expenses and certain specific and pecuniary bequests. The will proceeded as follows: "I declare that the said William | George Fitzpatrick is to be paid out of my estate the debt or sum of money owing by me to him the amount of which the said William _ George Fitzpatrick will disclose to my other trustees."

On Mth July 1926 the respondent gave notice to the appellai that the debt or sum of money owing by the testator to him at th time of his death was the sum of £410 10s. 4d., and requested them to pay that sum to him forthwith. The appellants thereupo refused to admit liability for that amount and asked for an accom showing whence the liability arose and how the amount was m: up. In reply to that letter the respondent, without admitting he was bound to do so, furnished particulars of the amount disclo by him, and subsequently demanded payment of £410 10s. 4d. as the debt due to him. The appellants having refused to pay th amount, the respondent issued an originating summons asking the determination of the following question: "* Whether upon true construction of the said will of the said William Francis Gilbert {otherwise Francis William Gilbert) deceased the declaration in said will in the words following that is to say "I declare that said William George Fitzpatrick is to be paid out of my estate debt or sum of money owing by me to him the amount of which tl said William George Fitzpatrick will disclose to my other trust constitutes a legacy"; and asking for an order " directing payment to be made to him the said William George Fitzpatrick by Ann Mary Gilbert and Philip Henry Gilbert the executrix and execut respectively of the will of the said William Francis Gilbert (otherwise Francis William Gilbert) deceased of the sum of four hundre pounds ten shillings and four pence being the debt or sum of moni owing to him the said William George Fitzpatrick by the said W Francis Gilbert (otherwise Francis William Gilbert) at the time o his death and which he the said William George Fitzpatrick has it accordance with the terms of the said will disclosed to the Ann Mary Gilbert and Philip Henry Gilbert."

On the hearing of the summons the question was amended bj the insertion at the end thereof of the following words, namely, " sum of such amount as the said William George Fitzpatrick shoul so disclose."

As before stated, Hwing J. held that the direction in the will» has been set out constituted a legacy to the respondent of the amoutti disclosed by him; but the real contention between the partie whether the respondent is entitled to payment of this amount 01

of the estate without establishing his claim to the satisfaction of the H- ©. or A.

executors or in legal proceedings. For the respondent it is said that the direction in the will to which we have referred means that the amount of the debt as disclosed by the respondent shall be paid out of the estate. For the appellants it is said that that direction amounts to no more than that the respondent shall be paid out of the estate such an amount as is legally due to him.

Tn our opinion the respondent's contention is correct. It is clear by the terms of the will that the testator intended to acknow- ledge that he was indebted to the respondent, and the question is whether the words, "the amount of which the said William George Fitzpatrick will disclose to my other trustees," operated to make the amount so disclosed conclusive proof of the amount of that debt.

We have pointed out that the will contains a general direction for payment of debts, and it follows that, if the contention of the appellants be correct and the respondent is entitled to recover no more than he can prove to be legally owing to him, the clause dealing specially with the debt of the testator to the respondent has no effect whatever and might well not have been included in the will. It is the first duty of the Court in construing a will to give effect, if possible, to every provision contained in it and, having regard to the facts already detailed, we find it impossible to hold that the declaration inserted by the testator with specific reference 'to the debt owing by him to the respondent should be treated as mere surplusage. No other alternative has been presented to us, for counsel for the appellants was unable to suggest that the clause in question would have any effective operation unless it were construed as meaning that the disclosure of the amount by the respondent was to be conclusive as to the amount of the testator's debt to him. The words of the direction in question, while not as clear as they might have been, appear to us to be capable of the meaning which the respondent seeks to put upon them, and, in the circumstances, we think that the respondent is entitled to payment out of the estate of the sum of £410 10s. 4d., though we are unable

to agree with the learned Judge in thinking that the words of the will are sufficient to constitute a legacy.

Substantially the appeal fails, but, as the matter seems to hay been contested in the Supreme Court on the question of legacy r no legacy, we think the costs of both parties of this appeal should be paid out of the estate of the testator. ; a

Hiccrss J. This case was treated before the learned primary Judge on the basis of a legacy instead of a debt, inasmuch as the summons stated that Mr. Fitzpatrick claimed to be interested in the relief sought "as a legatee" under the will of Gilbert. the only question that remains ultimately for decision is as to effect of the declaration in the will with regard to the debt due Fitzpatrick - is the amount of this debt, as disclosed by him to two " other trustees," to be accepted by them conclusively, without any question? The will begins by directing the trustees to p "my just debts and funeral and testamentary expenses " ; follow some legacies; and then it says "I declare that the William Gilbert Fitzpatrick is to be paid out of my estate the or sum of money owing by me to him the amount of which the William Gilbert Fitzpatrick will disclose to my other truste What is to be paid by the other two trustees to this trustee therefore, the debt that is owing - actually owing - to him. solicitor who drew the will probably referred specially to payn of this debt because of the unusual double relation of creditor executor (as intended), and because of the doctrine that appointment of a creditor as an executor often extinguishes debt in case the creditor take probate (see Williams on Exe llth ed., pp. 1058-1059). The clause operates also as a admission that there was some debt - an admission which simp the duty of the co-executors ; and it informs them that Fitzpat will " disclose " the amount. This also simplifies their duty. B that is all. The words used are not that Fitzpatrick is to be paid the amount of the debt as disclosed by him, or that the disclosure of an amount by him is to be treated as conclusive. The "conclusive" is not used, or any equivalent words. A

I should have thought it obvious that there is nothing in the wo used to relieve the co-executors of their duty to pay only the d that was actually owing. No one denies that a testator can m

his creditor's statement of the amount owing conclusive ; but the H- ©. or A. burden lies on the plaintiff to show that such an unusual provision 19a has been made ; and that burden has not been satisfied. There are Guserr no express words to such an effect; and there is no necessary Fees intendment.

According to the argument for the plaintiff, if a testator keep a current account with his grocer, and the testator cannot foresee how the account will stand at his death; then, if words are used such as in this will, and the grocer " discloses " a debt of £10,050 because

of a land transaction as well as because of the groceries, the executors

must pay the whole without investigation. I assume honesty of opinion on the part of the grocer. There are differing opinions as to what constitutes a debt.

Tt has been urged for the plaintiff that unless the testator's words make the plaintiff's statement conclusive as to the amount they are " meaningless." I suppose what is meant is that the words add nothing further to the duties of the co-executors under the will. But even if a clause merely state what the law would imply - e.g., the clause directing the payment of "my just debts" before the legacies - that does not justify the Court in inserting by conjecture a direction which is not to be found in the will either in express words or by necessary intendment. I have stated the object with which the words were probably inserted.

Tn my opinion, the order is wrong in directing payment of the amount disclosed by the plaintiff merely because it has been so disclosed by him.

Order appealed from varied by striking out the first declaration, and the words " pursuant to such declaration aforesaid" in the second declaration. Costs of this application of both parties - those of appellants as between solicitor and client - to be paid out of the estate of testator.

Solicitors for the appellants, Griffiths, Crisp & Baker.

Solicitor for the respondent, Tasman Shields. VOL. XXXIX. 12