COURT IN THE SUPREME COURT OF SOUTH AUSTRALIA FULL COURT King C.J.(1), Duggan(2) and Prior(3) JJ.

CWDS Construction of will - will prepared by Public Trustee and informal codicil made subsequently by testator - whether testator intended to make fresh disposition of certain property to daughter by codicil or merely confirm previous disposition to her - trial judge's view that fresh disposition intended upheld - appeal dismissed.

HRNG ADELAIDE, 6 September 1991 #DATE 3:10:1991 Counsel for Appellant: Mr E G Reinboth (John Basil Vertudaches) Solicitors for Appellant: Stanley and Partners Counsel for Respondent Plaintiff Ms L E Millard (Public Trustee) Solicitors for Respondent: Olssons Counsel for Respondent
Mr J S Roder Defendant (Peter William Vertudaches) Solicitors for Respondent Treloar and Treloar Defendant

JUDGE1 KING C.J. The facts in relation to this appeal are set out in the judgment of Justice Duggan. 2. The ambiguity which gives rise to the doubt and difficulty arises from the following words in the codicil which was prepared without professional assistance: "which is to be left to my daughter Mrs Dianne Buic also my Savings Bank Acc. and my Saving Investment Acc.". The essential question to be decided is whether the testator intended to make a fresh and different disposition with respect to the house and bank accounts or whether the reference to those assets is merely descriptive of and confirmatory of the dispositions made in the will. 3. I think that it is important to consider the circumstances which led to the making of the codicil and what they indicate as to the purposes which the testator had in mind. The testator referred to those circumstances in the clause of the codicil: "As my financial circumstances have changed". His financial circumstances had changed by reason of the sale of his blocks of land at Magill. That transaction enabled him to make present gifts to certain of the beneficiaries named in the will. They included his nephews and nieces being the "Pisani family" referred to in the codicil. It also enabled him to purchase the house at 2 Hill Street Kensington and to generate a rental income from it. It also enabled him to create a term deposit at the Commonwealth Bank. 4. The consequences of the land transaction to which I have referred, had implications for the dispositions made in the testator's will. In view of the present gifts made to the members of the Pisani family and intended to be in substitution for the bequests to them in the will, it was necessary to revoke the testamentary dispositions made in their favour. The acquisition of the house provided a fund out of which the testator could make provision for the maintenance of the house at No. 4 Hill Street in which his daughter would be living. The creation of the term deposit out of a portion of the proceeds of sale, made it necessary to provide for its disposition and as it answered the description of money standing to the testator's credit at the Commonwealth Bank, to exclude it from the "Dianne Fund". 5. The testator attended to these consequences of the change in his financial circumstances in the codicil. He made clear that the Pisani family had no further claim on his will. He applied part of the rental income from the newly acquired house to the maintenance of the house which would be occupied by his daughter. He limited the fund which was the subject of the benefit to the daughter to what was included in the "Dianne Fund" at the time of the making of the will, by specifying the savings account and the saving investment account, thereby excluding the term deposit. He made a specific disposition of the term deposit to his sons. 6. These provisions all flow from the testator's changed financial circumstances. There is nothing in the change in his financial circumstances which would indicate an intention to convert the gift of a life interest in the house and Commonwealth Bank money into an absolute gift. If he formed that intention, it must have been for reasons unconnected with his financial circumstances. It is true that Dianne's situation had changed since the making of the original will. She had come home from hospital and was living with the testator. Nevertheless she was still an outpatient at a psychiatric hospital. If he were motivated to alter his dispositions in favour of Dianne, I would have expected the testator to have amplified his stated reasons for making the codicil, to include an explanation of his reason for such an alteration. He did not do so. There appears to be no good reason why he would have decided to make absolute gifts to his mentally unstable daughter, thereby putting it in her power to dispose of the property, perhaps to her own detriment during her lifetime, or on her death by will to the detriment of the testator's sons or one or other of them. 7. I have reached the conclusion that the words in question are not dispositive, but merely descriptive of the testator's previous disposition to his daughter, for reasons which may be summarised as follows: 1. The adjectival mode of expression is not what I would expect if a major dispositive change were intended. The words relied upon as dispositive appear as merely incidental to the provision for the maintenance of the house. Although I would accept that the word "left" would ordinarily import an absolute gift, I consider that the incidental mode of expression conveys a descriptive rather than a dispositive sense. The reference to the bank accounts is explained by the need to make clear that the "Dianne Fund" does not include the term deposit newly created out of the proceeds of the sale of the land. 2. The expressed reason for the codicil is the change in financial circumstances. That would not lead sensibly to an alteration in the limited nature of the benefit conferred on Dianne, which was no doubt dictated by her mental condition. 3. The absence of a limit on the period for which the newly acquired house is "to be let and continued on as now" and the rental applied in part to the maintenance of the house which is the subject of the benefit to Dianne, suggests strongly that the testator was still thinking in terms of Dianne's interest terminating on her death. If the testator intended that her benefit be converted into an interest in fee simple, his mind would naturally have turned to the period for which the other house was to remain unsold and he could be expected to have made an appropriate provision. There is

to my mind a tacit assumption that Dianne's interest is for her life and that the requirement to retain the other house and to use part of the rental for maintenance of that house, would cease upon her death. 4. The testamentary dispositions disclose an underlying purpose of equality of treatment of the sons. I see no sufficient reason to suppose that the testator intended to put it in the power of a mentally unstable daughter, to dispose of the property in a way which would deprive the sons of the ultimate benefit of it or would disturb the equality of benefit between them which he clearly intended. 8. I find myself unable to agree with the view taken by the learned judge appealed from, and would allow the appeal. 9. I would answer the questions as follows: 1. (a) No. (b) Yes. 2. (a) No. (b) Yes - except the term deposit referred to in Acknowledgment of Term Deposit No. 001888.

JUDGE2 DUGGAN J. The first respondent who is the sole executor of the will of Basil Emmanuel Vertudaches sought a determination of certain questions relating to the construction of the will of the testator. The appellant John Basil Vertudaches (John), a son of the deceased, has appealed against the learned trial judge's decision. The first respondent adopted a neutral position at the hearing of the appeal, but the conclusions of the trial judge were supported by the second respondent, Peter William Vertudaches (Peter), the testator's other son. At the time of the testator's death there was one other surviving child, Dianne Jennifer Buic (Dianne). He was also survived by a deceased daughter's children (the Pisani grandchildren). Although the Pisani grandchildren were mentioned in the will they no longer have any rights in respect of the estate following the execution of a deed of family arrangement. 2. The testator died on 20th August, 1985 leaving the following assets and liabilities: "ASSETS House property situated at 2 Hill Street, Kensington being the whole of the land comprised in Certificate of Title Register Book Volume 4131 Folio 732 $52,500.00 House property situated at 4 Hill Street Kensington being the whole of the land comprised in Certificate of Title Register Book Volume 1340 Folio 144 $57,500.00 Commonwealth Savings Bank Adelaide Account No. 9061674: Balance at credit 6737.49 Interest accrued 61.87 $ 6,799.36 Commonwealth Savings Bank Adelaide Account No. 5001073 Balance at credit 27,965.92 Interest accrued
612.91 $28,578.83 Commonwealth Savings Bank Norwood Account No. 28626 (Rent account):- Balance at credit 2960.80 Interest accrued 20.93 $ 2,981.73 Commonwealth Savings Bank Term Deposit No. 1888:- 11.25% due 20/9/85 $80,000.00 M.L.C. Policy No. W4266244 proposed by the deceased on the life of D.J. Buic. Surrender value $ 479.82 LIABILITIES Funeral Expenses
$ 1,294.50 Income Tax for year ending 30th June, 1985 $ 1,461.07" 3. Probate of the will as contained in two paper writings was granted on 9th January, 1989. The first of these documents is dated 5th April, 1979. It was prepared by the first respondent and properly executed. The second document was written out by the testator on a single sheet of paper. It was signed by the testator but was not otherwise in proper form. 4. In the first document the testator granted a life interest in his residence and household furniture and effects at 4 Hill Street, Kensington to Dianne. Upon her death the residence and effects were to be sold and the proceeds held on trust for John and Peter in equal shares. There was also a direction that "moneys standing to my credit with the Commonwealth Bank of Australia" were to form a fund to be called "Diannes Fund". The income from this fund was to be paid to Dianne during her lifetime and upon her death the moneys were to be held upon trust for John and Peter in equal shares. The residue of the estate was to be divided into three equal parts to be distributed to John and Peter as to two equal parts and the other part was to be distributed between the Pisani grandchildren. 5. The second document which is dated 16th December, 1984, states as follows: "This is my last Will. As my financial circumstances have changed I want my first will with the Public Trustees to be altered. I now have sold my land at Magill, and have purchased a house at Kensington which is now rented out. I want this to be let and continued on as now. $1,500 out (sic) rents to be put aside to cover repairs to rented house and my own house at 4 Hill Street Kensington which is to be left to my daughter Mrs Dianne Buic. also my Savings Bank Acc. and my Savings Investment Acc. The Pisani family have received $30,000 from me, my deceased

daughters children, $6,000 each. They have no further claim on my will. My sons John and Peter to receive yearly half the rent on let house. My Term Deposit Book money to be shared by my sons John and Peter after all expenses are taken care of." 6. The learned trial judge was asked the following questions: "1. Whether in the events which have happened the provisions in the deceased's will relating to the deceased's residence at 4 Hill Street Kensington ... (a) constitute the granting of an absolute interest to Dianne Jennifer Buic of the deceased's said residence at 4 Hill Street Kensington aforesaid (hereinafter called 'the deceased's residence'), or (b) constitute the granting of a personal right of residence and/or a life interest to the said Dianne Jennifer Buic in the deceased's residence. 2. Whether in the events which have happened the provisions in the deceased's will relating to the deceased's savings bank account and savings investment account ... (a) constitute an absolute gift to the said Dianne Jennifer Buic of the whole of the contents of the deceased's savings, and savings investment, bank accounts, or (b) create a trust whereby all moneys standing to the credit of the deceased at the Commonwealth Bank of Australia, including the deceased's savings, and savings investment accounts, are to be held upon trust by Public Trustee upon the trust set forth in paragraph (2) of Clause 4 of the deceased's will dated the 5th day of April, 1979." 7. In the result the learned trial judge decided that the testator had made absolute gifts to Dianne of the residence at 4 Hill Street and the contents of his savings and savings investment bank accounts. The appellant disputed this interpretation and argued on appeal that the questions should have been answered as follows: "1 (a) No (b) Yes 2 (a) No (b) Yes, save that for the term deposit for $80,000.00 referred to in acknowledgment of a term deposit number 001888 issued by the Commonwealth Trading Bank of Australia, which term deposit the Public Trustee shall stand possessed upon trust for John Basil Vertudaches and Peter William Vertudaches in equal shares." 8. Before dealing with the points of construction raised by the appeal it is necessary to refer to some more background events taken from an agreed statement of facts which was placed before the learned trial judge. Dianne survived the testator, but died on 26th July, 1988. According to the terms of her will dated 2nd June, 1988, Peter became entitled to the whole of her estate. Dianne had been charged with the murder of her mother who was killed in February 1969. However she was later diagnosed as suffering from schizophrenia and was detained in various institutions until about 1980 when she was permitted weekend leave from Hillcrest Hospital. Later she was allowed to live at home with the testator although there is some doubt as to when she commenced to do so. Nevertheless it was agreed that she was living at home by September 1984, although she continued to work in the workshop at Hillcrest Hospital. Over the years the testator made a number of approaches to the authorities to have her released. 9. At the time of making the will prepared by the first respondent the testator owned three vacant blocks of land at Magill. He sold them in September 1984 for $250,000. Following this sale he purchased the house at 2 Hill Street Kensington which was next door to his residence. The purchase price was $58,000. The purchase was made in September 1984. As a further consequence of the sale of the vacant land the testator gave the sum of $30,000 to be shared between the Pisani grandchildren and he also made a gift of $30,000 to each of his sons, Peter and John. 10. I return then to the questions of construction raised on the appeal. As I have said the appellant challenged the conclusion of the learned trial judge that absolute interests in the deceased's residence and the savings bank accounts were granted to Dianne as a result of the testamentary provisions. No issue was taken as to the principles of construction employed by the learned trial judge. It is clear that he set out to determine the intention of the testator as disclosed by the words used in both documents. He also tested his construction against the background of the testator's family and property so as to "read the will from the position of the person making it". (Hardingham, Neave and Ford: Wills and Intestacy in Australia and New Zealand, 2nd edn p 276; In re Heidenreich (1981) 27 SASR 455.) Nevertheless it was argued that the proper application of these principles should have led to the result contended for by the appellant. 11. After referring to the house at 2 Hill Street the second document continued: "I want this to be let and continued on as now. $1,500 out rents to be put aside to cover repairs to rented house and my own house at 4 Hill Street Kensington, which is to be left to my daughter Mrs Dianne Buic. Also my Savings Bank Acc. and my Saving Investment Acc." (my emphasis) 12. The appellant argued that the reference to 4 Hill Street and the bank accounts was no more than a description of the effect of the first document, namely, the creation of a life interest in the house and the setting up of "Diannes Fund" out of the moneys standing to the testator's credit with the Commonwealth Bank. The second respondent argued that the words used by the testator indicate an intention to make absolute gifts of the house and the moneys in the savings accounts. 13. On any view of the matter the testator was effecting important changes to his original will and he was obviously conscious of that fact. He employed authoritative language. He used the phrase "to be" on two occasions prior to the reference to 4 Hill Street. He stated that he wanted the first will "to be altered" and he directed that 2 Hill Street was "to be let". If he had intended to leave his residence to his daughter I am of the view that he would have used the phrase "to be left". I have given close consideration to the argument that the adjectival phrase beginning with the words "which is" may be no more than a further description of the testator's residence and that the main purpose of the sentence was to designate the houses which were to be repaired out of the fund of $1,500. However I have difficulty in appreciating why, if this was so, the testator would refer also to the "Savings Bank Acc." and the "Savings Investment Acc." which had no connection with the house. There was no reason for him to summarise the previous gifts. 14. Furthermore the terms of the first document and the instructions upon which they were based leave no room for doubt as to the testator's awareness of the difference between a life interest in the house and a right to income only from the fund on the one hand and an absolute interest in the house and fund on the other. Despite the economy of language used in the second document I am of the opinion that the testator would have used different and more particular language to describe the previous dispositions. I think this is particularly so in the case of the bank accounts. Even if it is conceded that the words "to be left" might be a loose way of describing the granting of the life interest in the house, I feel confident, after reading the document as a whole and taking note of the testator's use of language, that he would have made specific mention of the right to income only if he had intended to do no more than note the effect of the first document. 15. Mr Reinboth for the appellant stressed the reasons given for the changes, namely, the changed financial circumstances of the testator. However this is an obvious reference to the changed nature of his assets following the sale of the Magill properties. There were now two houses instead of one and he was obviously concerned about the maintenance of both. There had also been an alteration in the circumstances relating to the Pisani grandchildren. But I think it would be artificial to confine the testator's purpose too narrowly as a result of the reference to changed financial circumstances. 16. I have also considered the argument arising out of the direction that the house at 2 Hill Street was "to be let and continued on as now". No specific direction was given as to when such letting was to cease and a possible inference is that it was to be let throughout the lifetime of the daughter. In my view, however, this argument would have been of more significance if there was an unrestricted call on the rent for the maintenance of 4 Hill Street. However the testator provided that only $1,500 was to be set aside from the rent to cover maintenance on both houses. I think it likely that the testator was contemplating repairs which would be required either immediately or in the reasonably short term when he made this provision. I appreciate that this does not resolve the problem as to the time during which 2 Hill Street was to be let, but the lack of a more specific provision is insufficient to influence my view as to the intention to be inferred from the references to 4 Hill Street and the bank accounts. 17. It is my view that the learned trial judge answered the questions asked of him correctly and I would dismiss the appeal.

JUDGE3 PRIOR J. I agree with Justice Duggan. The answers given by the learned trial Judge should be affirmed. I agree with his reasons. I have nothing to add to those reasons or those given on the appeal.