Marks v Pope

THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION YOUNG

1 HIS HONOUR: This is a suit to construe a will made in 1924, in the events which have happened, to determine who is entitled to a one-half share of capital. 2 Ernest John Marks died on 9 January 1925 having first made and published his last will on 13 May 1924. Probate of this will was duly granted to the executors named therein on 16 April 1925. The plaintiffs are the current trustees of the will. 3 The testator was survived by his widow (who died on 22 June 1927), by his three sons Roy, Eric and Cedric, and his five daughters (listed in order of their deaths), Hazel, Iris, Wanda, Myrtle and Myee. For brevity, and not meaning any disrespect, I will refer to the testator's relatives by their first names. 4 The summons is in an unacceptable form. The three plaintiffs suing as trustees of the estate of Ernest John Marks are also named as three of the nine second defendants. One cannot sue oneself even in a different capacity, so that the names of the plaintiffs must be struck out from amongst the second defendants. The four persons named as first defendants are also named again as second defendants and their four names must be struck out. This leaves, as the second defendants, Dianne Janet Johnson and Gail Christine Taylor, whom, I am informed, are a granddaughter and niece of a son, respectively. They represent the persons entitled as next of kin. However, there is a problem in that the plaintiffs' solicitor has purported to appear for the second defendants as well as the plaintiffs. This is not permissible, or at least is not permissible without the leave of the Court. 5 It is very surprising that these elementary mistakes have been made in formulating the summons, especially as the plaintiffs' solicitors kept reminding the Court that they are property law specialists. However, I am satisfied that everyone who had an interest in the outcome of this litigation was aware of its existence and had the opportunity to participate, and as counsel for the plaintiffs as trustees, and the first defendants as primary claimants, have put forward all possible arguments in the interests of all concerned, it was best to proceed to deal with the case on the merits, on the basis that an amended summons would be filed in due course. 6 The testator essentially provided as follows:

(1) His real estate, livestock, machinery, plant and tools used in connection with his business as a dairy farmer would pass to this three sons.

(2) His library and household furniture and personal chattels would be divided equally between his eight children.

(3) The residue of his personal estate would be invested, with the income paid for the maintenance of his wife for life; and

(4) Subject to the widow's interest, the residue of the personal estate was to be held on certain trusts for his five daughters.

It is this last matter that is the focus of the present proceedings. 7 The will provided, so far as is relevant, as follows: "…to stand possessed of the said residuary trust funds UPON TRUST for my five daughters in equal shares in manner hereinafter directed I DIRECT my Trustees to retain the share of each of my daughters in the residuary trust funds upon the trusts following namely:- UPON TRUST to pay the monies to my same daughter for her life (and so that she shall not have power while under coverture to anticipate same) AND after the decease of such daughter IN TRUST for all or such one or more exclusively of the others or other of the children of my same daughter as she by any deed or deeds revocable or irrevocable or by will appoints AND in default of and subject to any such appointment IN TRUST for all of the children of my same daughter in equal shares or if only one for that one absolutely AND in case my same daughter shall die leaving no issue her surviving IN TRUST for my other daughters in equal shares and so that the share or shares accruing to each or any daughter of mine under this trust shall be subject to the trust hereby declared concerning the original share of the same daughter under this my Will PROVIDED ALWAYS that if any daughter of mine die in my lifetime leaving a child or children who survive me such child or children shall take and if more than one equally between them the share which he she or they would have taken in the residuary trust funds on the death of such parent if such parent had survived me including any share or shares which would have accrued to such parent under the trust and provision in that behalf hereinbefore contained…" 8 In a simplified form, what happened was that Hazel was the first daughter to die, her death being 30 August 1978. She died without issue. Iris died on 8 April 1980, leaving two children, the defendants Trevor and Joy. Wanda then died on 23 April 1984 leaving two children, the defendants Kevin and Lurline. Myrtle died on 26 July 1994 without leaving children, and finally, Myee died on 14 January 2000, again without leaving children. 9 The trustees administered the residuary trust funds by paying the income after the death of the widow to the five daughters in equal shares. When Hazel died they divided the income into four shares and paid it equally to the four daughters. When Iris died, they distributed a quarter of the capital equally between Trevor and Joy. When Wanda died they distributed a third of the then capital (equivalent to a quarter of the original capital) to Kevin and Lurline. They were then possessed of a half of the trust fund. They paid the income equally to Myrtle and Myee until Myrtle died, and then the whole of the income to Myee. The vital question in the present case is, who is entitled to that one-half share of capital which amounts to some $354,000? 10 There are four possible answers to the question I have just posed. Which of those answers is correct to a great degree depends on the construction of the words "for my other daughters" in the passage I have extracted. The first answer is that those words mean "my other daughters then living", the second answer is that it means "my other daughters who survive me", the third possibility is "the daughters who survive me and who are either alive or have had children". The fourth possibility is that the rule in Lassence v Tierney (1849) 1 Mac & G 551; 41 ER 1379, applies. 11 The initial key question is, what is meant by the word "other"? Mr Whittle SC, who appears for the first defendants, has taken me through the authorities that where there is a gift over "to the others", it does not normally mean to the survivors. The authorities are principally In re Hagen's Trusts (1877) 46 LJ Ch 665; In re Chaston (1881) 18 Ch D 218; Stanley v Bond [1913] 1 IR 170; In re Crosse [1933] WN (Eng) 36, 37; 77 Sol J 116 and Heron v Ulster Bank Ltd [1974] NI 44. 12 In In re Chaston at 223, Fry J said: "The gift over is to 'the others and other of my said children'. Other than whom? Prima facie it would seem to mean other than the child who has died… . But the difficulty in the way of that construction is this, that the testator has clearly contemplated that the class to which it is to go over will be or may be a diminishing class, and may consist of one person only, because it is to go to the 'others or other,' and to be equally divided between them if more than one. It cannot, therefore, in my judgment include the whole of the children other than the child on whose death the gift is to take place." 13 In Stanley v Bond O'Connor MR (Ireland) said at p 175: "Prima facie 'other and others' has no reference to survivorship…"

His Lordship considered that the diminishing effect of "other or others" did not apply in the instant will and read the word "others" literally. 14 If one interprets the word "other" literally, then when a particular daughter dies, it is the four other daughters who take her share equally. This means, however, that when Myrtle dies her share of capital is split between Hazel, Iris, Wanda and Myee. However, this is rather strange because Hazel has already predeceased and her share has accrued to Iris, Wanda, Myrtle and Myee. Accordingly, one goes round and round the circle. The same mutatis mutandis applies to Myee's share. 15 Accordingly, Mr Harris, who appears for the plaintiffs, says that the above solution is so bizarre that no Court should follow it. 16 The next possibility is that one actually reads "other" as daughters surviving the daughter who died. However, this does not work because when Myrtle dies her share would accrue to Myee, but when Myee died, there are no surviving daughters. 17 This causes Mr Harris to say that there is an intestacy in respect of the one-half share of capital. He acknowledges that there are utterances such as those quoted in Fell v Fell (1922) 31 CLR 268, 275-6, that the Court leans against intestacy and does not presume that the testator meant to die intestate if, on a fair construction, there is reason for saying the contrary. See also Kirby-Smith v Parnell [1903] 1 Ch 483, 489-490. However, one must remember that this is not a strong presumption and the Court should not lean too heavily against a construction that produces an intestacy, particularly a partial intestacy: In re Wragg [1959] 1 WLR 922, 929. 18 The other possible interpretation is that one reads "other daughters" as meaning the daughters or their representatives who are eligible to take a share. Mr Harris says that this is really supplying words. It is probably is supplying the word "eligible" before "daughters" but this implication may be justified because of the words that follow "and so that" shortly after the words "other daughters". By these words and those that follow, the testator has indicated that the trust for the "other daughters" is to operate so that the accruing share shall be subject to the same trust as the original share of the same daughter. Accordingly, if the trust of the original share has come to an end, Hazel cannot take under the accruing share. However, when Myrtle dies, her share can pass to Iris' children, Wanda's children and Myee, and likewise, when Myee dies, her share can pass to Iris' children and Wanda's children. Moreover, the words that follow "PROVIDED ALWAYS that", whilst not directly applicable as they only deal with the situation where a daughter dies in the testator's lifetime, suggests that the testator had in mind that the children would take the share that their mother otherwise would have taken including accrued shares. 19 Accordingly, in my view, apart from the rule in Lassence v Tierney, the contention of Mr Whittle SC for the first defendants, succeeds. 20 I now pass to the rule in Lassence v Tierney, sometimes called the rule in Hancock v Watson [1902] AC 14. In the words of Lord Davey in the latter case: "It is settled law that if you find an absolute gift to a legatee in the first instance, and trusts are engrafted or imposed on that absolute interest which fail, either from lapse or invalidity or any other reason, then the absolute gift takes effect so far as the trusts have failed to the exclusion of the residuary legatee or next of kin as the case may be." 21 It seems to me that in the instant case the gift is an absolute gift to each daughter with trusts engrafted on it. Having reached that conclusion, then as Lord Davey says at the same page, the next of kin must be excluded. In my view the trusts have not failed because on their true construction Mr Whittle SC's argument is correct. However, the rule in Lassence v Tierney may be relevant to the question of costs which Mr Whittle SC has informed the Court that he wishes to argue after these reasons are handed down. 22 I should thus simply publish these reasons and ask counsel for the first defendants to bring in the appropriate short minutes of order. I will tentatively fix Monday 19 March at 10.30 am for discussion of the short minutes and argument as to costs, but if some other Monday is more convenient to counsel, then provided my Associate has a week's notice, that day may be changed. ***************

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