Hamersley & Ors v Brian Rossiter Newton

Hamersley & Ors v Brian Rossiter Newton - [2005] WASC 221 - WASC 2005 case summary — Zoe

[167]

59 There are also submissions to the effect that the gift of the fee simple in remainder in Fairfield to "the then eldest son of Leonard Hamersley - - - after the death of the said Leonard Hamersley" constitutes a class gift so that the individual beneficiary will not be ascertainable before the class (sons of Leonard Hamersley) closes and that this also imports a contingency in the gift of the remainder. The plaintiffs respond by the submission that this is not a gift to a class of beneficiaries but, rather a gift to an individual who will be identified at the time of the cessation of the earlier life interest whenever that may be. I accept the plaintiffs' submission that this is not an occasion for the application of the class closing rule known as the rule in Andrews v Partington [1791] EngR 1535; (1791) 3 Bro CC 401; 29 ER 610 not only because it is not a class gift being to one child only, but also because it is a gift intended to take effect at the time of the termination of the prior life interest (whenever that may be) and at that point it will identify the life tenant's eldest son who will take an interest which is then no longer capable of being divested - see generally per Goff J in Re Harker's Will Trusts [1969] 3 All ER 1, 4 - 5. Even if this were not so, and the gift of Fairfield in remainder should instead be regarded as a species of class gift, the class would close at the expiration of or sooner determination of the life interest which, on the present hypothesis would take place upon the effective surrender by Leonard Hamersley of his present life interest - Bassett v Bassett [2003] NSWSC 691; (2003) 58 NSWLR 258 per Windeyer J at 266; Windham v Darby (1896) LR (NSW) 272 and Jull v Jacobs (supra). It has long been accepted that acceleration may occur even though the effect may be to alter the class of persons designated to take by accelerating the time for ascertaining the class, see: Re Davies; Davies v Mackintosh [1957] 3 All ER 52 at 54 and Re Kebty - Fletcher's Will Trust, Public Trustee v Swan and Snowden [1969] 1 Ch 339 at 344 as explained in Re Harker's Will Trusts (supra).

[168]

60 Counsel for the third defendants submitted that the gift of the remainder in Fairfield to the eldest son of Leonard living at the latter's death created only a contingent interest in Fairfield for Daryl Hamersley (and by necessary implication for Robert Hamersley) and that the decision in Hoysted v Federal Commissioner of Taxation [1920] HCA 29; (1920) 27 CLR 400 per Knox CJ and Starke J at 408 - 409 and per Isaacs J (dissenting) at 420 was authority for the proposition that a gift to A upon A achieving a certain age, or after the expiration of a fixed period of years, until A had satisfied that criterion, constituted no more than a contingent gift - see also In Re Astor; Astor v Astor [1922] 1 Ch 364. There is no doubt that the learned Justices in the first of the three Hoysted appeals did refer to the dispositions under Mr Campbell's will as being contingent interests but the decision was to the effect that each of the six surviving "contingent beneficiaries" was a joint owner in the land comprising the estate of the deceased and so was eligible for the special deduction available for joint owners under the Federal land tax legislation in circumstances where the Federal Commissioner of Taxation had disallowed those claimed deductions. The classification of the six surviving children of the deceased as joint owners in the estate land being administered by the trustees for 21 years before eventual distribution between all surviving children, or the deceased's grandchildren of deceased parents, was confirmed in the two subsequent Hoysted appeals to the High Court and to the Privy Council respectively - Hoysted v Federal Commissioner of Taxation [1921] HCA 56; (1921) 29 CLR 537 and Hoysted v Federal Commissioner of Taxation [1925] UKPCHCA 3; (1925) 37 CLR 290. No issue arose in any of those three cases about whether or not the testamentary gift of all the estate property including the land to the trustee, to be run as a business for 21 years and the ensuing profits to be distributed equally between the children until the expiration of the 21 year period when the estate assets were to be sold and the proceeds distributed equally between the deceased's children was a gift which was capable of acceleration or whether the interests which the beneficiaries took were vested but subject to divestment or otherwise. However, the decision in each of the three Hoysted appeals unquestionably accepted that the surviving children of Mr Campbell were, within the meaning of the Federal land tax legislation, joint owners of the lands which were being assessed to land tax and as such were entitled each to a deduction of £5,000 available under that legislation for joint owners. This conclusion demonstrates that those beneficiaries had an actual interest in the land and that this was recognised by Knox CJ and Starke J at 409. Isaacs J (in dissent) refers to the children's interest in the land as being "not a legal interest but an equitable interest" (at 419). The description of the Campbell children's interests in their late father's lands as being contingent in this litigation must be read in that context and in the light of the decision which concluded that they did hold an actual interest or estate in the land so rendering them entitled to the deduction claimed on their behalf by the trustee.

[170]

62 Then there are the cases of In Re Astor; Astor v Astor (supra); Re Flower's Settlement Trust (supra); Re Mallinson Consolidated Trusts; Mallinson & Ors v Cooley [1974] 2 All ER 530; In Re Townsend's Estate; Townsend v Townsend (1886) 34 Ch D 357 and In Re Francis; Francis v Francis [1905] 2 Ch D 295 which have held, in the particular circumstances of each case, that generally speaking a gift "to A when he shall attain the age of 25 years" without more, or a gift to "such one of the testator's sons who surviving him shall first attain the age of 21" are contingent and cannot be accelerated, unless the particular contingency has occurred or, for other reasons, can be eliminated as a possibility. By contrast, findings that the interest under a conditional gift had become vested but remained subject to defeasance, were made in Re Taylor (deceased) Lloyds Bank Ltd v Jones [1957] 3 All ER 56; Re Howes (deceased); Quinton v Howes [1971] 2 NSWLR 387 at 407 - 408; and Kotsar v Shattock [1981] VicRp 2; [1981] VR 13. So much depends on the terms of the particular wills or other instruments making those gifts that it is unproductive to attempt close comparisons or differentiations of the individual cases. However, it is by no means difficult to see why, a gift conditional upon one or more of the donees attaining a particular age, where there is no prior limited gift (as in Re Astor (supra)), should be regarded as imposing a condition precedent upon the gift leaving it contingent unless that event happens. Gifts, such as the remainder in this case, left on the basis that they will go to one of the several children to be identified when the life tenant dies, can more readily be seen as gifts where the limitation is restricted to the protection of the prior interest, which if it is terminated, can then allow the subsequent gift to take effect according to the circumstances prevailing at the time of cessation of the earlier interest. That appears to be the rationale appearing from the observations of Dixon J in Tompkins v Simmonds (supra) at 558 - 559 and it seems to me to apply with particular effect in this present case.

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Judgment (179 paragraphs)

Hamersley & Ors v Brian Rossiter Newton (as Executor of the estate of Robert Malcolm Hamersley (Dec)) & Ors [2005] WASC 221 (7 October 2005)

Parties

Legislation Cited (3)

Cases Cited (19)