Perpetual Trustees Executors & Agency Co Ltd v Walker - [1953] HCA 21 - HCA 1953 case summary — Zoe

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Perpetual Trustees Executors & Agency Co Ltd v Walker

[1953] HCA 21

High Court of Australia|1953-07-01|Before: Taylor JJ, Green J

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Source facts

Court

High Court of Australia

Decision date

1953-07-01

Before

Taylor JJ, Green J

Source

Original judgment source is linked above.

Judgment (56 paragraphs)

[1]

High Court of Australia Dixon C.J. Fullagar, Kitto and Taylor JJ. Perpetual Trustees Executors & Agency Co Ltd v Walker [1953] HCA 21

[2]

ORDER Appeal allowed. Order of Green J. of 3rd November 1952 varied (1) by substituting for the answer given to question 2 (1) (b) in the originating summons the answer The testator's widow is entitled to receive the annuity of £1000 while Huonden remains unsold whether she resides there or not; and (2) by discharging the answer given to question 3 (a). The costs of all parties of the appeal to be paid out of the residuary estate of the testator, those of the trustee as between solicitor and client.

[3]

This is an appeal from an order of the Supreme Court of Tasmania made by Green J. upon an originating summons which raised questions concerning the meaning and effect of the will of Alan Cameron Walker deceased. The testator died on 12th December 1931, his will being dated 27th February 1930. He left a widow, his second wife, and a son and daughter by his first wife, both of whom attained full age. Included in his estate was his residence, which was situated in Macquarie Street, Hobart, and called "Huonden". At the time of his death he and his wife were living at Huonden. By his will he bequeathed all his household furniture and effects, silver, silverplated ware, pictures, glass, china and musical instruments to his wife absolutely. He devised his residence to his trustee upon trust for sale with power of postponement and directed that the net proceeds of the sale should be paid into his trust fund. He added a declaration that Huonden should not be sold without the written consent of his wife. He then empowered his trustee until the sale of Huonden to let the same for such periods not exceeding three years at the best rent the trustee could reasonably obtain, and he directed that after payment thereout of all rates, taxes, assessments, repairs, insurance premiums and other outgoings the trustee should pay the balance to his wife during her life without power of anticipation. But by the fifth clause of his will he went on to direct that until Huonden was sold, his trustee, instead of letting the same, should permit and suffer his wife if she should wish to do so to reside therein, she being responsible during her residence for the maintenance and upkeep thereof and for the payment of rates, taxes, land taxes and fire insurances and all other outgoings thereon. Next he devised and bequeathed all the residue of his real and personal estate to his trustee upon trust for sale and conversion and out of the proceeds thereof to pay debts, funeral and testamentary expenses, to invest the balance, which in his will he called his trust fund, and to pay the net income from such investments as his will afterwards set forth. Then followed a direction upon which much turns. It is cl. 7 and is in the following terms: - "While "Huonden" remains unsold and my wife resides there I direct my Trustee out of the income of my Trust Fund to pay to my said wife but without power of anticipation One thousand pounds per year by equal quarterly instalments but if "Huonden" be sold during the lifetime of my wife I direct my Trustee to increase such sum payable to her to One thousand one hundred and fifty Pounds per year". The will proceeded by the clauses which followed to dispose of the remaining income of his trust fund by dispositions in favour of his son and daughter and his son's children.

[10]

To extract all this from the use in the context of the word "increase" seems to ascribe to the draftsman too much precision in his choice of expression and too fine an appreciation of the logical implications or consequences of the language he employed. If it were granted that the manner in which the word "increase" is used does imply an assumption that at the time of sale the widow would be receiving an annuity of £1,000, why should not the assumption be attributed to his supposal that she would in fact be living in the house? Why should it be attributed to a belief that he had provided by a clause that does not appear in the text that the annuity of £1,000 would be payable while she did not reside there? But there is no sufficient ground for treating the use of the word "increase" as implying any assumption that at the time of sale the widow would be in actual receipt of £1,000 a year. The word "increase" may well have been used simply in relation to the figure the testator had named without any consideration of the contingencies in which one or other amount was payable. In any case there are limits to what a court of construction can do in reforming the provisions of a will by inference and those limits seem to me to be transcended by the proposal to read out of the will the condition so clearly expressed by the words "while my wife resides there" or to read into the will a further condition producing a contrary effect. As Lord Eldon said, individual belief ought not to govern the case, it must be judicial persuasion; Attorney-General v. Grote [1] . Speaking for the Privy Council, Turner L.J. described the rule thus: - "it is upon intention, either expressly declared or collected by just reasoning upon the terms of the instrument, or evidenced by surrounding circumstances, where surrounding circumstances can be called in aid, and not upon conjecture merely, their Lordships feel bound to proceed. The strict observance of this rule, unimportant as it may be in particular cases, is of the highest importance, when considered generally, with reference to the rights of property; for if it be not strictly observed, those rights will become dependent upon the mere arbitrary will of the Judges whose duty it may be to adjudicate upon them" - Doe d. Brodbelt v. Thomson [1] . Lord Halsbury expressed the contrast with some of his accustomed vigour: - "it would be a strange canon of construction for a will to say that wherever you can discover what a testator's desires and wishes were, although you cannot find express words in the will which give the authority sought for, nevertheless you can supply words and declare trusts which are not to be found in the will itself" - Hunter v. Attorney-General [2] . In Coltsmann v. Coltsmann [3] , a contention was advanced based upon what the testator must be supposed to have intended. Lord Cairns, in referring to the contention, said the "argument proceeds upon an a priori assumption of what the testator would naturally intend; which cannot be allowed to weigh against the proper construction of the words which he has used" [4] .

[16]

The condition in the present case does not appear to me to be a true condition subsequent. The words "while my wife resides there" are attached to a direction to pay to her £1,000 a year by equal quarterly instalments. They express a condition which she must fulfil in order to qualify for the payments. It is true that there is a difficulty as to the period over which she must reside to qualify for the payment. Probably the better construction is that she is to be paid by equal quarterly instalments at the rate of £1,000 a year provided that during the quarter preceding the payment of the instalment she has resided at Huonden. Perhaps the condition would be better designated a continuing condition. The appellants, however, treat the condition as describing a state of facts which the testator treated as existing, if not at the time when he made his will, at all events at the time when it would take effect. So regarding it, the appellants construe it as impliedly requiring a forfeiture in the event of that state of affairs ceasing. It is true that Jarman on Wills in speaking of continuing conditions 8th ed., (1951), at p. 1465 says that to this class seem to belong conditions requiring a devisee to reside in a particular house or to use and bear the name and arms of the testator, &c., and then proceeds "Strictly speaking continuing conditions are merely a variety of conditions subsequent". This may be correct when an estate or interest in a corpus is given, but it does not appear to me to be a proper characterization of a condition attached to periodical payments of income when that condition must be fulfilled and in default payment does not accrue due to the annuitant. But in any event I am not prepared to hold that the condition that the testator's widow must reside at Huonden is too uncertain even if it be a condition subsequent. The condition makes it incumbent upon her to live at a definite place. It is expressed in the terms of ordinary speech and appears plainly to require that she shall make it her ordinary dwelling. It is true that, like very many conceptions of ordinary life, there is an incompleteness of logical definition in the conception; but it does not follow that it is too uncertain to be made the ground of a forfeiture. The amount of absence from a man's dwelling which is necessary to rob it of that character and make it no longer his residence may be a matter of degree. But everyone understands that if it is the place to which he returns from temporary absences, from journeys abroad and from peregrinations upon pleasure or business, where he maintains an establishment, and keeps his more permanent personal belongings and household furniture, it is his home and he resides there. The legislature has had no hestitation in making "residence" in a given place the criterion of liability to taxation, of rateability and of the right to vote. Indeed the jurisdiction of this Court may depend on the residence of a litigant in a State. It seems strange that a testator should be denied the power of prescribing residence in a given dwelling place as a qualification for his bounty.

[33]

In this state of authority the Privy Council decided the important case from Ontario of Sifton v. Sifton [2] . The provision there in question consisted in a trust for the testator's daughter. The trust was to pay to or for his said daughter a sum sufficient in the trustees' judgment to maintain her suitably until she was forty years of age, after which the whole income of the estate should be paid to her annually. Then followed the critical clause, viz., "The payments to my said daughter shall be made only so long as she shall continue to reside in Canada" [3] . Their Lordships held that this clause was a condition subsequent and that it was void for uncertainty. The judgment of the Privy Council which was delivered by Lord Romer proceeded upon the ground that the proviso failed to lay down with sufficient definition how much absence from Canada was permissible and for what purposes and occasions. Lord Romer referred to the questions which had been raised involving, as they did, (1) the effect of a period of absence exceeding eleven months for the purpose of study in Europe, (2) the possibility of the daughter's again proceeding to Europe after returning for one month to Canada, (3) the relevancy of the purpose or occasion of her absence, (4) a request for a definition of the periods for and the circumstances in which absences from Canada were permissible. Not a little turned on the word "continue". Lord Romer said that the learned judges in Canada who upheld the validity of the condition had found themselves unable to give any more precise direction than that the testator's daughter might leave Canada for a limited period and for a purely temporary purpose without being able to define either the word "limited" or the word "temporary". His Lordship had cited the statement of Fry J. in In re Viscount Exmouth; Viscount Exmouth v. Praed [1] , that a condition subsequent must be "such a limitation that, at any given moment of time, it is ascertainable whether the limitation has or has not taken effect" [2] . "If the provision be clearly expressed, it is the fault or the misfortune of the person affected if he should fail to know whether he is committing a breach of it. But this is implied in the language used by Fry J. He said that it must be "ascertainable" whether the provision has taken effect or not; not that it must be ascertained in fact by the person affected, or even ascertainable by him without difficulty" [3] . In the application of this test Lord Romer referred to the foregoing questions and said: "But if the appellant's" (the daughter's) "interest under the will is to be forfeited upon her "ceasing to reside in Canada," she has a right to have those questions categorically answered; and inasmuch as they cannot be so answered, the words, if constituting a condition subsequent, are void for uncertainty" [4] . It will be seen that this decision does not relate to residence in or occupation of a house but to the degree of connection which must be maintained with a country to fulfil a requirement of "continuing to reside" in it. That connection, described by the word "residence", was considered too elastic and too much a matter of degree to form the ground of a condition subsequent. It is not a decision of general application to the word "residence" and does not appear to me to govern such a case as the present. Indeed Lord Romer's judgment includes the following passage: "Their Lordships' attention was called during the arguments to numerous authorities in which the Court has been called upon to consider the meaning of the words "reside" and "residence," and the like. But these authorities give their Lordships no assistance in construing the present will. The meaning of such words obviously depends upon the context in which the words are used. A condition, for instance, attached to the devise of a house that the devisee should reside in the house for at least six weeks in a year can present no difficulty. In some contexts the word "reside" may clearly denote what is sometimes called "being in residence" at a particular house. In other contexts it may mean merely maintaining a house in a fit state for residence. It is plain, however, that in the present case the word "reside" means something different from either being in residence or merely maintaining a residence" [5] . Of this passage Jenkins J. in In re Coxen; McCallum v. Coxen [1] , said that he thought that it showed: "(a) that the meaning (whether definite or uncertain) of the words "reside" and "residence" in a will depends on the context in which the words are used, (b) that in some contexts a perfectly definite meaning can be attached to such words, and (c) that the words "reside" and "residence" have different (and less readily ascertainable implications) when used in relation to residence in a particular country from these which they have when used in relation to residence in a particular house" [1] . The devise his Lordship had to consider in that case was of a dwelling house to trustees who were directed to permit the testator's wife to reside therein during her life or for so long as she should desire to reside therein. The house was to fall under the residuary trusts "from and after her death or if in the opinion of the trustees she should have ceased permanently to reside therein". Jenkins J. construed the provision as requiring personal residence and as meaning that on permanent cesser of personal residence the house should fall under the residuary trusts. His Lordship said: - "Therefore, the condition is, as a matter of definition, to operate in the double event of (a) Lady Coxen ceasing personal residence in the house, and (b) such cesser being permanent. The latter event involves intention. Lady Coxen must have given up all intention of ever again resuming personal residence in the house, or in other words, must have no "animus revertendi." To put it objectively, she must have given up personal residence once and for all. It seems to me that so far as definition goes the double event involved in the condition as I have construed it is prescribed with sufficient certainty and precision. I see no reason why a judge of fact should not on any given state of facts be perfectly capable of deciding whether it has or has not happened. Indeed, the problem is no more insoluble than the question whether a given individual has in a given state of facts abandoned his domicile of origin and acquired a domicile of choice, which the court has never regarded as incapable of decision. The circumstance that it may be difficult in this or that state of facts to determine whether the double event has happened or not does not, in my judgment, make the condition bad. (See In re Wilkinson [2] and In re Talbot-Ponsonby's Estate [3] ). I do not see why it should ever be impossible to do so" [4] .

[35]

This decision was distinguished by Harman J. in In re Field's Will Trust; Parry-Jones v. Hillman [5] . The bequest there in question was of some furniture used by the testatrix in her house. She devised the house to A. for life and after his death to B., if B. should survive the testatrix and attain the age of twenty-five years, conditions that were fulfilled. She bequeathed the furniture upon trust to permit A. to have the use of it during his life and after his death in trust for B. if he should attain the age of twenty-five and should occupy the property. Harman J. held the condition that he should occupy the property to be a condition subsequent and to be void for uncertainty. His Lordship said of Re Coxen; McCallum v. Coxen [1] , that the condition was that in the opinion of the trustees the beneficiary had ceased to reside and that Jenkins J. had no difficulty in holding that such a condition was certain because the court could tell what the opinion of the trustees was. "It was not the court's opinion, but theirs, which mattered" [2] . This point was discussed by Jenkins J. [3] . If what precedes the discussion is examined it will appear, I think, that Jenkins J. was prepared to hold the condition valid independently of the reference to the trustees' opinion. Further, with great respect to Harman J., the discussion itself shows that Jenkins J. took the view that "if the testator had insufficiently defined the state of affairs on which the trustees were to form their opinion, he would not have saved the condition from invalidity on the ground of uncertainty merely by making their opinion the criterion" [4] . How Jenkins J. regarded the introduction of the trustees' opinion as a criterion is shown by his Lordship's statement, "and in my view the testator by making the trustees' opinion the criterion has removed the difficulties which might otherwise have ensued from a gift over in a double event the happening of which, though in itself sufficiently defined, may necessarily be a matter of inference involving nice questions of fact and degree" [5] . The grounds of the decision of Harman J. were that it was not a condition entitling the beneficiary to enjoyment of the chattels so long as his occupation of the house should last, "but one under which, once there is occupation, the condition is satisfied and the chattels and the money belong absolutely to the person who is to fulfil the condition" [1] . Consequently "there must be a certainty ab initio as to what he must do to fulfil it" [1] . "I think," said his Lordship, "that it is the event required by the will which is uncertain. What is meant, it may be asked, by the words, "and shall occupy my freehold property"? Must it be a rateable occupation, must it be an occupation as a freeholder, as a lessee, as a weekly tenant, as a tenant at will, or as a sojourner overnight?" [1] .

[37]

At this point in the sequence of cases a decision was given by the House of Lords with reference to conditions subsequent, which has a considerable importance in the present case, although the condition there in question did not relate to residence. It is Bromley v. Tryon [2] , and is important because it shows that it is not because a condition depends upon matters of degree or because questions of fact may arise involving difficulty in its application that it must be held uncertain. The condition of defeasance there included the contingency of any of certain persons described becoming "entitled to the possession of the Stoke Hall Estate or the bulk thereof". It was a settled estate which might be composite of land and money and the word "bulk" was interpreted as referring to value not area. The Lord Chancellor (Lord Simonds) after giving the word this meaning proceeded: - "Then it was said that even so the words are uncertain in content, for it is purely a question of degree what constitutes the "bulk." I cannot accept this contention. I think that according to the ordinary use of language the bulk means the greater part, which may according to the subject-matter refer to area, number or value. And that I may not be thought guilty of a solution which is equally obscure, I will add that "greater part" means anything over one-half. I am of opinion that the words "the bulk thereof" are not subject to the same vice as were the words "of the Jewish faith" and "reside" in the cases that I have cited and as the expression "relation by blood" was thought to be by the Privy Council in Sifton v. Sifton [3] , though Russell J. had determined otherwise in In re Lanyon [4] . In deference to the argument of learned counsel who sought to illustrate the alleged obscurity of the relevant words by reference to the facts of the present case, I will only add this. It does not follow because the words of a defeasance clause are sufficiently clear to give the clause validity that there may not be cases in which its application is difficult, and I apprehend that, if there is a real doubt, the court will show the same favour to a vested estate in applying the clause as it does in construing it" [5] .

[53]

It is clearly not enough, however, to feel sure that the testator would intend the annuity of £1,000 to continue until Huonden should be sold even though his widow should not be residing there. If the will contained nothing but a direction to pay that annuity to her while she resides at Huonden, there would be no alternative but to say that the annuity ceased when she ceased to reside at Huonden. But there is much more than that. The annuity of £1,000 is given originally "while "Huonden" remains unsold and my wife resides there". Then there is a provision for a change "if "Huonden" be sold during the lifetime of my wife", but no express provision for a change if Huonden remains unsold but the wife ceases to reside there. If Huonden be sold during her lifetime the trustee is directed "to increase such sum payable to her to £1,150 per year". The word "increase" and the reference to the "sum payable to her" strongly suggest that the testator is regarding his wife as receiving £1,000 per year whenever Huonden is sold if it be sold in her lifetime. If she were not entitled to receive that annuity during any period between her ceasing to reside at Huonden and a sale of Huonden in her lifetime, the word "increase" and the reference to "such sum payable to her" would be entirely inappropriate if such a period eventuated. In that event the sale of Huonden would not involve the increasing of a sum then payable to her but the arising of a new right to a new and different annuity - perhaps after an interval of many years during which no annuity at all was payable. In such an event it would be impossible to say, except in a highly artificial and unreal sense, that the trustee, commencing to pay the new annuity, was "increasing the sum payable to her". But this is not all. Clause 8 of the will goes on to dispose of the "remaining income" of the estate during the lifetime of the wife. Clause 8 follows immediately on the provision for annuities for the wife which is contained in cl. 7. The expression "remaining income" appears to us to reveal the testator as contemplating and intending that one annuity or the other will be payable to the wife during her lifetime. It cannot, of course, be said that the words are entirely inappropriate if there should be a period during which no annuity is payable. But, if such a period were contemplated, one would expect different language to be used. As it is, cl. 8 is conspicuously and closely associated with cl. 7, and the natural meaning of the words "remaining income" is whatever is left after providing for whichever annuity may happen to be payable.